Uganda’s long-term treasury bonds attract strong investor interest

Uganda’s domestic debt market registered strong investor appetite in the latest multi-tenor Treasury bond auction held on November 26, 2025, with bids far exceeding the amounts offered across all maturities. According to the auction results released by the Bank of Uganda, the government reopened four benchmark bonds—2-year, 5-year, 15-year, and 25-year securities—and attracted demand running into the trillions.

The central bank had offered Shs250 billion for the 2-year bond, Shs350 billion for the 5-year, Shs450 billion for the 15-year, and Shs350 billion for the 25-year instrument. However, investors tendered significantly higher amounts. The 2-year tenor received Shs438 billion in bids, the 5-year saw Shs395.9 billion, while the 15-year bond attracted Shs760.6 billion. The 25-year bond was the most sought after, drawing an overwhelming Shs1.23 trillion—over three times the amount on offer.

Accepted bids mirrored this impressive demand. The Bank of Uganda took up Shs435.6 billion for the 2-year, Shs392.3 billion for the 5-year, and Shs742.8 billion for the 15-year bond. For the 25-year maturity, the bank accepted Shs1.207 trillion, reflecting the market’s growing appetite for ultra-long-term government debt. Analysts say this strong demand underscores increasing investor confidence in long-dated securities despite the high interest-rate environment.

Yields remained elevated across the curve, with the cut-off rates standing at 15.75 percent for the 2-year bond, 16.25 percent for the 5-year, 17.75 percent for the 15-year, and 17.95 percent for the 25-year. These rates continue to attract institutional investors—including commercial banks, pension funds, and offshore buyers—who are seeking high returns amid ongoing inflationary pressures.

Demand strength was further reflected in the bid-to-cover ratios: 2.098 for the 2-year, 1.998 for the 5-year, 1.627 for the 15-year, and 2.018 for the 25-year bond. Ratios above one indicate oversubscription, confirming robust competition for government paper. The 25-year bond, in particular, stood out for its strong bid-to-cover ratio, signalling increased willingness among investors to lock in long-term yields.

Both competitive and non-competitive participants were active in the auction. Competitive bidders secured Shs206.3 billion on the 2-year bond and Shs194.6 billion on the 5-year. Longer tenors also saw substantial competitive allotments, including Shs449.6 billion on the 15-year bond and Shs585.8 billion on the 25-year. Non-competitive bids were accepted in full across all maturities, highlighting continued participation by smaller and long-term investors.

The strong performance of this auction suggests sustained confidence in Uganda’s government securities, particularly for long-term instruments that help deepen the yield curve and support financing of infrastructure and development projects. Financial analysts say the overwhelming demand for the 25-year bond is a positive indicator for market stability and long-horizon capital planning. As the central bank continues reopening benchmark bonds, it is expected to enhance liquidity in the secondary market and further strengthen the structure of Uganda’s domestic debt portfolio.