Government makes its quarterly appearance in the capital market on June 1, looking to borrow P1.15 billion through three bonds and a treasury bill, BusinessWeek has learnt.
Each quarter, the Bank of Botswana (BoB) holds auctions of bonds and six-month treasury bills on behalf of government under the P15 billion note issuance programme which dates back to February 2011.
While the funds raised at the auctions are generally used for government budgetary support, the note issuance programme is also designed to develop and support the local capital market.
Documents made available to BusinessWeek indicate that on June 1, 2018 the central bank will reopen bond BW012 floating P200 million at a coupon of six percent, reopen bond BW011 floating P200 million at 7.75% and reopen bond BW013 floating P250 million at a coupon of 4.5 percent. A P500 million treasury bill will also be offered, with a maturity of December 5, 2018.
Bond BW012 was previously featured in the December 2017 auction where P100 million was allotted at a yield of 5.161%. A sum of P1.33 billion is
Bond BW011was last featured in the March 2018 auction where P100 million was allotted. A sum of P1.76 billion remains outstanding in the bond, under the note issuance programme.
Bond BW013 was last auctioned in December 2017 where P250 million was allotted at a yield of 3.78%.
In February, Finance Minister, Kenneth Matambo projected a deficit for the 2018/19 budget of P3.59 billion, which he said would be funded through “a combination of drawing down on existing loans, as well as on government cash balances”, which are held at the BoB.
The central bank has drawn confidence from the positive performance of the diamond mining sector thus far this year, revenues from which make up more than a third of the budget.
Mineral revenues are expected to contribute P24.59 billion or 38.3% of the 2018/19 budget revenues, according to Matambo’s projections.