Gov’t raises P905m debt

Government, through the Bank of Botswana, raised P905 million through the over-subscribed auction of three Treasury Bills (TB) last week. Each month, the central bank auctions TBs and bonds to capital market participants as part of the government’s P30 billion domestic debt programme. The last auction, conducted on July 30, did not feature the longer-term bonds, which have underperformed in recent months. At the auction, however, bidders showed strong interest in the securities on offer, with the 12-month TB attracting 10 bids worth P648 million for the P305 million on offer. The three-month TB received eight bids worth P550 million for the P300 million on offer, while the six-month TB had eight bids worth P440 million for the P300 million on offer. The TBs were all fully allotted, continuing a trend in recent auctions where investors have shown an appetite for the shorter-term securities offered by the central bank. Yields on the three-month TB declined marginally to 1.396 percent in the latest auction, from 1.408 percent in the previous, while the yield on the six-month TB fell to 1.505 percent from 1.509 percent over the same period. The yield on the 12-month TB dropped to 2.963 percent at the latest auction from 3.85 percent in January when the bill was previously offered. Trends in yields reflect the costs government incurs for securing debt from the capital market.