Government will return to the capital market on May 31, seeking to borrow P1.15 billion, by way of floating a six-month treasury bill and three bonds.
Every three months, government, through the Bank of Botswana, borrows from the local capital market to fund the national budget and also develop the market’s capacity.
The auctions are limited to commercial banks, which hold exclusive bidding rights. Other investors and issuers use the yields at the auctions to set the standard for returns in the capital market.
The borrowing is done by floating treasury bills and bonds which the market participants bid to buy into and receive a yield at maturity.
On May 31, an auction will be held to raise P500 million via a six month treasury bill and P650 million via the reopening of three existing bonds. The ongoing auctions are under government’s P15 billion note issuance programme, which dates back to February 2011.
Government raised P822 million at the last auction in March, again offering a six month treasury bill and reopening three bonds.