Gov’t raises P545m debt

Government raised an additional P545 million in debt at its latest foray into the capital markets under the P30 billion domestic borrowing programme. Each month, the Bank of Botswana raises debt for the government through the issuance of bonds and Treasury Bills of varying maturities at auctions exclusively attended by some commercial banks. At the last auction held on Friday, the central bank offered three bonds looking to raise P1 billion. Results of the auction indicate that bond BW013, which carried the shortest term on offer, attracted the most aggressive bidding, with a total amount allotted of P359 million against the P300 million on offer. The bond attracted bids worth P720 million from 13 bidders. Bond BW015, maturing in 2043, attracted bids worth P180 million for the P300 million on offer, with P101 million allotted, while bond BW011, which offered P400 million, attracted bids worth P273 million with P85 million allotted. Bond BW011 matures in 2031. According to analysts at Kgori Capital, yields at the last auction showed an uptick from their last allotments, with the BW013 rising 30 basis points, while the BW015 yield rose 50 basis points and the BW011 rose 30 basis points. The rising yields are in line with expectations that the government’s debt costs will increase as it more aggressively engages the market to fund budget shortfalls. Documents made available recently from the Finance Ministry indicate that government’s interest payments will rise from a projected P1.6 billion in 2021-2022 to P2.9 billion in 2022/23, as borrowings rise in the face of declining reserves.