Strong appetite for 15-year Treasury bond
What you need to know:
- High return from long-term risk free government securities continues to attract investors, The Citizen can tell.
- In the past months there was a positive trend for long term debt instruments for instance the 20 year bond issued on February 27, 2019 it was oversubscribed by more than twice.
Dar es Salaam. High returns for long-term government debt instruments continue to attract investors, The Citizen can report.
This follows 15-year treasury bond floated by the Bank of Tanzania (BoT) on Wednesday this week ended up being oversubscribed by 26.3 per cent, thanks to a slightly improvement in yields.
The bond’s auction summary published by the central cank indicates that weighted average yield to maturity increased to 15.62 per cent on Wednesday from 15.46 per cent on the previous auction on January 2, while the weighted average coupon yield went up to 15.36 per cent from 15.22 per cent respectively.
The government through the BoT sought to collect Sh90.7 billion via 15-year T-bond. However, investors tendered a total of 112 bids; worth Sh114.6 billion, equal to Sh23.9 billion oversubscription.
The central bank accepted 86 bids with the amount accounted for 83.6 per cent of the offered amount equivalent to Sh75.8 billion.
The highest bid was 91.1422 per 100 while the lowest was 72.9545 per 100, but the weighted average price for successful bids was 87.8660/100.
In the past months, there were positive trends for long term government securities, for instance, the 20-year bond issued on February 27, was oversubscribed by more than twice. With maturity and coupons rate at least 17 per cent the BoT collected Sh115.5 billion more than the offered amount of Sh39.5 billion.
In January, BoT offered 2-, 7- and 15-year Treasury bonds worth Sh64.4 billion, Sh88.7 billion and Sh91.4 billion, respectively, for government financing needs.
