By: Nghiinomenwa Erastus
The Bank of Namibia has sent out a notice to potential investors and wannabe investors that it seeks to borrow N$550 million by Thursday this week.
Treasury Bills are short-term government debt instruments issued by the Namibian government, denominated in Namibia Dollars (NAD).
Treasury bills are used by the government as a short-term funding instrument and as a tool to manage the government’s liquidity.
The money will be borrowed through 91-day T-bills/treasury bills, the announcement indicated.
The three-month T-bills will be on auction on Thursday at the central bank.
The government will issue I Owe You note indicting that it will pay back on 7 January 2022, when the T-bill matures.
Investors who do not want to cash out can also have an option to roll over their investments to other T-bills that will be on offer at that time.
The 91-day T-bills auction will be the first auction to roll out this October 2021.
The central bank auction calendar shows that there are five more T-bills auctions in October as the government seeks to borrow more and meet its target.
The government’s borrowing plan for the current financial year shows that its plan to borrow N$4,6 billion through treasury bills- as part of it quest to fill the N$29,4 billion funding gaps.
Investors in the T-bills will have to tender in multiples of N$10,000, with a minimum of N$10,000.
These instruments have a maturity of less than one year and are sold at a discount to their maturity value and carry no coupon.
T-bills are issued to the market at different maturities, ranging from 91 days to 364 days.
In the same month/October, the government through the central bank will redeem its GC21 bond- paying back what it borrowed the specific bond/ (I owe you note) to the investors.
There are also rewards to those who gave their money to be used by governments through bonds in October 2021.
The government, through the central bank, will pay coupon/interest on its 11 bonds- the payment will be done on 15 October, according to the calendar.
While in the 20 October, a special auction will behold, where the government will seek to borrow through fixed coupons and inflation-linked bonds.
Then lastly for October 2021, the government will give investors who have invested in the inflation-linked GI22, which is maturing next year to switch to other long-term bonds.