The Bank of Botswana, acting as government’s agent in the capital market, raised an additional P1.1 billion in debt for the fiscus, through the auction of three bonds and two treasury bills on May 27.
The amount raised at the auction was 74% of the total P1.5 billion offered by the central bank to bidders at the auction, compared to 59% allotted in the April auction. Minimal movements in yields were seen in the auction, while Kgori Capital analysts reported that the nine-year and 18-year bonds as well as the six month treasury bill were over-allotted by 1.4 times, one time and 1.1 times.
Three of the five securities on offer were also over-subscribed, with the values of bids exceeding the amounts on offer, most notably in the auction for the six month treasury bill where bids amounted to P800 million against the P500 million on offer.
Despite the stronger bidding demand seen at auctions of government securities in recent auctions, allotments have generally remained below 100% as the Bank of Botswana has sought to restrain demands for higher returns by the bidders.
The monthly auctions are attended by commercial banks which hold the exclusive status of primary dealers and bid for the different securities by offering the yields they are seeking.