GOVT PUTS UP E160M BONDS

MBABANE – Government is seeking to raise E160 million to pay-off a portion of its E3.5 billion short-term debt.
To raise this money, government, through the Central Bank of Eswatini, announced the reopening of government bonds.

The bonds that are reopening are SG 033 which is worth E30 million and shall mature on June 29, 2023, SG034 which is worth E40 million and shall mature on June 29, 2025, SG041 which is worth E40 million maturing in January 31, 2026 and SG042 worth E50 million  maturing on January 31, 2029.
The coupon rates for these bonds are fixed at 9.25 per cent, 9.75 per cent, 9.85 per cent and 10.25 per cent respectively.

According to the notice by the CBE, the auction date will be on  January 28, 2020 for the sum E160 million.
“The Bonds will be issued using the competitive multiple bid auction model and is open to the public including individuals, corporate and institutional investors. All investors should apply through the Primary Dealers who are the four local Commercial Banks,” reads in part the notice.

The purpose of the issuance states that it is to develop the secondary market, according to the CBE, was to establish a fair market price which would compensate both the borrower and investors for interest rate risks and to facilitate financial intermediation, while also meeting government budgetary requirements.

“The applicable Pricing Supplements and other relevant documents pertaining to the issuance is available for viewing at the Financial Markets Department of the Central Bank of Eswatini situated on the 3rd Floor, Umntsholi Building in Mbabane, as well on the Central Bank website www.centralbank.org.sz,” reads in part the notice.

Invited

The CBE invited interested parties to contact their commercial banks or collect application forms and further details at the financial markets department, Central Bank of Eswatini, Mahlokohla Street, P.O. Box 546, Mbabane.
Telephone: (+268) 2408 2144/2100/2294/2210
E-mails:
sandilmd@centralbank.org.sz, gcinadl@centralbank.org.sz
sabatham@centralbank.org.sz or philat@centralbank.org.sz
sandileng@centralbank.org.sz ;Website: www.centralbank.org.sz

To this, the Minister of Finance, Neal Rijkenberg, said government float bonds weekly and the money recouped was used to settle maturing bonds.
He said: “You will notice that the Central Bank offers treasury Bill every week for 91, 182, 273 or 364 days according to the planned calendar. The financial market buys these bills and Government has been using this money over the last few years to fund the budget.”

Rijkenberg said if a bill of 90 days was sold; it meant that in 90 days time government needed to pay the money back with interest.
He said government’s debt portfolio was around at E3.5 billionn in this short term debt.

“By now we are selling short-term bills to mainly pay for the maturing short term bills. This happens weekly. We also have medium term bonds that form part of our domestic financing. This is all in line with our budget and estimates book,” the minister said.
The advantage of using domestic financing above foreign, the minister said, was that it supported the local finance industry that in turn contributed significantly to the economy.

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