Tanzania: First two-year treasury bonds undersubscribed

The first two-year treasury bonds maturities auctioned this year have been received on a low note by investors resulting into under subscription.

Quarterly tax payment and other year-end obligations by most investors in the fixed maturities are attributed to the poor performance of the two-year treasury bonds auctioned on Wednesday.

Key investors in the first two- year treasury bonds auctioned this year are namely commercial banks, pension funds, insurance companies and some microfinance institutions.

The fixed term debt securities are important instruments used by most governments to borrow from the public to finance and invest into various infrastructure projects.

The auction summary from the Bank of Tanzania (BoT) shows that 82.6bn/- was offered for bidding but it ended attracting investors’ bids worth 20.74bn/-.

Yield rate for the 2-year bond expected to mature in 2018, increased to 17.28 per cent compared to 16.75 per cent of the same debt instrument auctioned in October last year. Similarly, coupon rate increased to 9.24 per cent compared to 9.16 per cent of the other session.

The highest bid was sold at 85.71, slightly higher than 88.00 of the previous sale while the lowest bid was 80.34 higher than 76.00 of the preceding trading.

The minimum successful price per each 100 was 80.34 while the weighted average price for successful bids was 84.54. A total of 81 bids were received and emerged successful.
Source: Daily News, reported from Dar es Salaam, Tanzania
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