Identifier: C2T1L1 | Revision: 2026-10-26

Decision and objectives

A company has cash available for nine months and receives three offers labelled safe income. Classify the legal claim before comparing quoted percentages. A Treasury security is a claim on the government; a bank bill is a security issued by a bank, not a deposit simply because the same bank distributes it; a corporate bond is a claim under its issuer's terms. The product name does not establish a guarantee, acceptable sale price or the investor's access.

Objectives: Classify issuer and contractual claim; Compare repayment sources; Calculate a full-cost bill outcome.

Prerequisites: C1T8L4, Shared foundations, Shared foundations.

Mechanics

A bill normally concentrates its promised payment at redemption. A coupon bond distributes income before returning principal, unless its contract instead amortizes principal or contains conversion or early redemption provisions. Nominal amount is the principal reference used to calculate payments; purchase cash can differ from nominal. The intermediary executes or distributes the security, while the issuer owes the contractual debt. Record both legal entities separately.

Treasury bill versus government bond primarily describes the original maturity category in the domestic framework. Remaining maturity answers a different question: a long-original-maturity government bond can have only months left. Never infer interest-rate exposure, protection or tax treatment from the word bond alone. Borsa Istanbul's official product descriptions distinguish public and private debt categories; MKK identifies their domestic book-entry context.

Price and return drivers

Return comes from promised income, purchase discount or premium, and any change in sale value. Credit risk is the possibility that the issuer fails to deliver the promised amounts. Interest-rate risk changes today's sale price even if payment promises are unchanged. A short bill can have little rate sensitivity and substantial credit risk; these are separate dimensions.

For a discount bill held to redemption, gross money gain = nominal repayment minus purchase cash. Net gain subtracts separately disclosed investor costs and any applicable tax. Redemption is a contractual promise, not proof of payment.

Worked case

Hypothetical TRY bank bill: nominal TRY 100,000; settlement today at 94 per 100 nominal; redemption in 180 days; no coupon; purchase fee TRY 100; custody through redemption TRY 50. Assume payment in full, no financing and a supplied teaching tax of zero. Gross purchase cash = 100,000 × 94 / 100 = TRY 94,000. Total outlay = 94,000 + 100 + 50 = TRY 94,150. Gross discount income is 100,000 − 94,000 = TRY 6,000; net gain is TRY 5,850. Net holding return is 5,850 / 94,150 = 6.2135%. The security does not yield 6% merely because the price is six points below par: the denominator is cash invested.

Adverse case

If the issuer pays only TRY 70,000 at the scheduled date, net loss is 70,000 − 94,150 = TRY −24,150, or −25.6506%. If it pays TRY 100,000 six months late, nominal loss may be absent but the planned spending date is missed. Neither holding to maturity nor custody registration cures issuer failure. An early exit at 90 per 100 gives gross TRY 90,000 before an additional sale fee; the original discount is not locked in when the investor sells.

Practical use

Ask the authorized intermediary for the issue identifier, final terms, sale restrictions, execution quote, settlement cash and custody arrangement. Public offering, qualified-investor and other restricted offerings are different access routes. This lesson does not assert that every bank or corporate issue is retail-accessible. Verify eligibility on the actual issue date. Tax depends on investor status and the security's issue/acquisition and income dates; the zero teaching tax is not a Turkish rate. The full tax workflow appears in C2T7.

Decision boundaries

Use a payment-matched bill only when its denomination, issuer exposure and settlement fit the cash need. A government issuer and a corporate issuer are not interchangeable because their yields look close. Do not substitute a dealer's reputation for analysis of the actual debtor. Decline a nine-month investment if a six-month payment need would force an uncertain secondary sale and no cash reserve exists.

Practice and references

Exercise: a hypothetical Treasury bill promises TRY 60,000 in 120 days, costs 95 per 100 and has total investor fees TRY 75; no financing or teaching tax. Calculate outlay and net gain. Answer: purchase = 60,000 × 0.95 = TRY 57,000; outlay = TRY 57,075; net gain = 60,000 − 57,075 = TRY 2,925; net holding return = 2,925 / 57,075 = 5.1248%.

Takeaway: identify the debtor and payment promise before interpreting the return.

Reference guide: treasury-bill, domestic-corporate-bond, debt-holding-return, Nominal amount, Credit risk.

Next: C2T1L2. Topic test: C2T1.

Primary sources (checked 2026-10-26; changing terms require a publication recheck): Borsa Istanbul Debt Securities Market products — Public Debt Instruments; Private Sector Debt Instruments; Lease Certificates; Eurobonds; MKK Borsa Istanbul Debt Securities Market — Instrument list and member transfer/settlement processes.

Shared reference guide