LUSAKA (The Business Telegraph) – Zambia will in the week begining the 26 July seek to raise four yards in proceeds from the sale of pandemic long dated and shorter dated government securities. According to an advertised prospectus, the Bank of Zambia will be in the market for K2.67bln ($147mln equivalent) in 5,7,10 and 15 year COVID 19 bonds on 31 July. Zambia has to date sold K6.8bln worth of disease pandemic bonds in private offerings which aligned in pricing to the primaries. This will be the first primary and public market offering. Minimum participation in this sale will be half a yard (K500,000).
Proceeds of the COVID bond are part of the K8bln economic stimulus package that the MinFin approved on 22 June to absorb some of the corona related liquidity risks through dismantling of arrears to contractors, suppliers and retirees accounting for 30.5% of outstanding stock of K26.3bln.
Earlier that same week on 30 July, the Bank of Zambia will seek to raise K1.3bln ($70.0mln equivalent) in treasury bills whose performance has been remarkably favorable at 135% in subscriptions year to date. Yields continue to climb down significantly as the central bank injects liquidity through its presence in Open Market Operations – OMO to maintain financial stability.
With markets fairly cash flush both local and offshore, it is expected that there will be adequate purchasing power in the two security offerings next week.
The Kwacha Arbitrageur