Overview:
The minimum competitive bid has been set at Shs200.1 million, while non-competitive investors can participate with as little as Shs100,000. Non-competitive bids of up to Shs200 million per tenor will be accepted in full at the auction's cut-off yield.
Kampala — The Bank of Uganda (BoU) will this week raise Shs990 billion from the domestic market through the sale of Treasury bonds as the government continues to finance its budget and refinance maturing debt.
According to an auction notice issued by the central bank, investors will bid for three reopened Treasury bond tenors comprising a two-year, five-year and 15-year bond with a combined offering of Shs990 billion.
The two-year Treasury bond, carrying a coupon rate of 15.25 per cent and maturing on November 16, 2028, will account for Shs230 billion of the offer. The five-year bond, with a 15 per cent coupon and maturing on May 20, 2032, has an offering amount of Shs330 billion, while the 15-year bond, carrying a coupon of 15.8 per cent and maturing on June 23, 2039, will raise Shs430 billion.
The auction is scheduled for Wednesday, July 1, with successful bidders expected to settle their purchases on Thursday, July 2.
The central bank said competitive and non-competitive bids must be submitted electronically through the Central Securities Depository (CSD) by 10am on the auction day. Only licensed Primary Dealer Banks are permitted to submit competitive bids on behalf of investors.
The minimum competitive bid has been set at Shs200.1 million, while non-competitive investors can participate with as little as Shs100,000. Non-competitive bids of up to Shs200 million per tenor will be accepted in full at the auction’s cut-off yield.
BoU said all successful bids will be allocated at a uniform price equivalent to the lowest accepted auction price or the highest accepted yield. It also reserved the right to increase or reduce the amount offered and to accept or reject bids in whole or in part, depending on market conditions.
Treasury bonds are long-term government securities that enable the state to raise funds from the domestic market while offering investors a fixed return over the life of the investment. They are widely held by commercial banks, pension funds, insurance companies and individual investors seeking relatively low-risk investment opportunities.