By Silindzelwe Nxumalo
IN a bid to develop the secondary market and a fair market price, the Central Bank of Eswatini (CBE) has launched E200 million worth of government bonds which are set to be auctioned on December 12, 2023.
According to the statement issued by the bank, the coupon rates for these bonds were fixed at 10.00 per cent, 10.25 per cent, 10.50 per cent, and 11.00 per cent respectively.
The country’s biggest banking entity stated that the purpose of the fair market price was to compensate both the borrower and investors for interest rate risks and further facilitate financial intermediation that is in line with Government budgetary requirements.
The bank stated that bonds would be issued using the competitive multiple bid auction model and was 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,” read part of the statement.
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According to the statement, the applicable Pricing Supplements and other relevant documents about the issuance were available for viewing at the Financial Markets Department of the Central Bank of Eswatini as well as on the Central Bank website.
Furthermore, the CBE, as an agent for the Government of Eswatini, invited bids for the Government Bonds stating that the issuer reserves the right to allocate an additional amount of up to 100 per cent of the amount on offer on each bond.
The bank urged investors to submit application forms for bids through their Primary Dealers stating that they should ensure that applications are submitted timely so that all bids are captured on the Central Securities Depository System (CSD) before 10:00 a.m. on the auction date.
The CBE stated that the settlement date would be December 15, 2023, with a form of issuance being paperless (Central Securities Depository) and the auction results shall be made available on the Bank’s website immediately after the auction. “Yield to Maturity to be quoted in multiples of 0.005 per cent E10 000 for individual (non-competitive) bidders and E1 million for Institutional direct bidders,” read the statement.
They further stated that the interest payment date for SG075, SG076, SG077, and SG078 was May 31 and November 30, each year. The Bank stated that the bonds were issued under the E5 billion Note Programme, 2021, and listed on the Eswatini Stock Exchange with the secondary market trading in multiples of E10 000 to commence on December 15, 2023. “Successful bidders who fail to honour their obligations on time will be disqualified from participating in one subsequent bond auction.”
GOVERNMENT BONDS ON AUCTION
1. SG075, reopening 3, maturing, 31 May 2026 with Coupon 10.00 per cent, E50 million
2. SG076, reopening 3, maturing, 31 May 2028 with Coupon 10.25 per cent, E50 million
3. SG077, reopening 3, maturing, 31 May 2030 with Coupon 10.50 per cent, E50 million
4. SG078, reopening 3, maturing, 31 May 2033 with Coupon 11.00 per cent E50 million
