GOVT ISSUES 3 BONDS VALUED AT E150M

MBABANE – Individuals, corporate and institutional investors have been presented with an opportunity to attract value for money through the release of three bonds worth E150 million.

The Central Bank of Eswatini (CBE) has reported that the five, seven and 10 year bonds, which will be issued through competitive multiple bids, will be auctioned on June 26, 2018 and the settlement date will be June 29, 2018. The coupon rate for these bonds will be fixed at 9.25 per cent (E40m), 9.75 per cent (E40m) and 10.25 per cent (70m).

All investors were advised to apply through primary dealers being the four commercial banks namely; Standard Bank, SwaziBank, Nedbank and FNB.

The minimum bid size is E10 000 for individuals (non-competitive) bidders and E1 million for institutional direct bidders. The interest payment date of the coupon which has been fixed at 9.25 per cent, 9.75 per cent and 10.25 per cent will be December 29 and June 29 in each year.

The redemption date will be June 29, 2023, June 29, 2025 and 29 June 2028.  
“The purpose of the issuance is to develop the secondary market, establish a fair market price which will compensate both the borrower and investors for interest rate risks and to facilitate financial intermediation while also meeting government budgetary requirements,” CBE announced. It should be noted that CBE was strongly advised to refrain from additional budget financing.

The Executive Board of the International Monetary Fund (IMF) directors noted that strong fiscal adjustment would help release pressures on monetary policy. They underscored that the CBE should refrain from additional budget financing and, in the context of the peg with the South African rand; the CBE should maintain the policy rate at a positive spread with the South African Reserve Bank’s rate.

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