Government issues $1,5 billion two-year Treasury bond
ZW$1,550 billion so as to assist in financing of critical development programmes by the Government.
With access to external financing remaining constrained due to sanctions and the continued accumulation of external arrears, Treasury has said that domestic financial markets remain the major source of budget financing for the Government.
In a public notice yesterday, the Apex Bank invited interested entities and individuals to subscribe for the debt instrument, whose coupon rate is 18 percent per annum, payable semi-annually and priced at ZW$100 percent.
“The purpose of this loan is to assist in financing of the Government of Zimbabwe programmes,” said the RBZ.
“Interest is payable at the Reserve Bank of Zimbabwe, Harare, half-yearly on the following dates, 20 February and 20 August until maturity of the bond through ZETSS to the registered bondholders through the nominated custodian bank.
“The bond will be redeemed at par in Zimbabwean dollars at the Reserve Bank of Zimbabwe on the maturity.”
The invited potential investors include but not limited to pension and provident funds, insurance companies, mutual funds, commercial banks, and other interested institutions as well as individuals.
“The minimum application amount is ZW$1 000 000 (one million dollars), authorised signatory(ies) must authenticate any material alteration on application form, settlement must be done through Real Time Gross Settlement (RTGS) as advertised,” reads part of the notice.
The RBZ has said that the transfer of the bond must be done through registered custodians who hold accounts within the Central Securities Depository at the Apex Bank. It directed applicants to access the prospectus and application forms from the Bank’s website and outlined special features that include; prescribed asset status, liquid asset
status, tradability, acceptance as collateral and redeemability at RBZ upon maturity.
Reliance on internal resources for funding has seen domestic debt, as at end April 2021 amounting to ZWL$20,9 billion, according to Finance and Economic Development Minister, Professor Mthuli Ncube.
These include Treasury Bonds (ZWL$13,5 billion), Treasury Bills (ZWL$4,8 billion) and Domestic Arrears at ZWL$2,4 billion.-chroncle.cl.zw
