BOZ raises USD46mn in un­der­sub­scribed bond sale

• Auc­tion was 72% un­der­sub­scribed with 1.47 bid cover • 2yr,5yr and 10yr tenors cor­rect up­wards

Zambian Business Times - - FINANCIAL MARKETS -

In a 72% un­der­sub­scribed kwacha bond sale on Fri­day 24 Au­gust, the Bank of Zam­bia raised the kwacha equiv­a­lent of USD46mil­lion. On of­fer was K1,650mil­lion, yet bids were anaemic at K697mil­lion of which K473mil­lion were ab­sorbed in al­lo­ca­tion. Bid cover ra­tio was 1.47.

Auc­tion skew was con­cen­trated in the 5-10yr tenors ac­count­ing for 82% of the bond sale on.

Yields rose 100bps for 2yr and 75bps for the 10yr to 19.5% and 20% re­spec­tively. The most at­trac­tive point on the kwacha bond curve is the 5yr pay­ing 20.4%, 40bps higher than the June auc­tion.

Bond yields as ex­tracted from Bank of Zam­bia web­site.

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