BOZ raises USD46mn in undersubscribed bond sale

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

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.