By: Nghiinomenwa-vali Hangala
The government managed to raise N$2 billion domestically this week, through its 14 listed bonds, instead of the outside market.
This is according to the auction outcome as released by the Bank of Namibia, which conducted the bonds auction to borrow on behalf of the Ministry of Finance.
The tender results show that 401 bids were received from investors, worth N$3.2 billion across 16 bonds. The money came from investors who wanted to lend to the government at various interest rates in response to the government’s intentions for the money. This came after the government announced that it would utilise the local market for further borrowing instead of external markets.
Local investors responded by submitting their bids with only 4 bonds not oversubscribed (more money offered than what the government intended to raise). This led to the central banks borrowing more from certain bonds and less from some, in contrast to the tender invites.
Most of the investors were attracted to the GC35, which attracted 52 bids worth N$585 million, or 24% of the total tenders. According to the results, 20 of the 52 bids were successful, and the government borrowed N$312,1 million, more than it invited (N$160 million) through the GC35.
This has resulted in the central bank not borrowing anything through 2 other bonds, such as the GC40, which was also almost over two times oversubscribed.
The investors were less interested in the inflation-linked GI27, attracting only N$18,9 million worth of bids despite the government’s intended borrowing of N$95 million.
The oversubscription of the various bonds aligns with government’s sentiments that the domestic market has plenty of capital looking for a growth avenue. erastus@thevillager.com.na
