By: Nghiinomenwa-vali Hangala
The Bank of Namibia, on behalf of the central government, is inviting investors whom it borrowed N$3.6 billion from to a GC27 Switch Auction on 23 September 2026.
The fixed yield for the GC27 will be announced on Monday, 21 September 2026.
The GC27 Bond is one of the I Owe You Notes that the government has used to borrow money from the public since October 2023 and is maturing next year.
In total, the government borrowed N$7.6 billion through the GC27, which was taken off the market in April 2025.
The government then started conducting switching auctions.
Switch auctions are a platform given to investors to move their money from the maturing bond to other long-term debts.
An opportunity for the government to keep the money for longer and pay interest instead of paying it back to the investors.
At maturity, the government is expected to return the money its borrow from the investors.
The government has conducted 6 switch auctions so far, with investors switching (government retaining) N$3.6 billion so far.
Currently, the government owes N$3.6 billion through the GC27, and in an attempt to switch more, the central bank will hold another auction for investors to move their money.
According to the Central Bank, the switch auction will be conducted on a multiple–price basis, where successful bidders will switch at the price of the destination stock they bid.
The switch will be carried out voluntarily, and only holders of the source stock are eligible to participate in this program.
There is no limitation on the number of bids that participants can submit, provided that each submission has a different yield/price to avoid possible inconsistencies.
The Central Bank stated that the debt switch program is a tool for the government to restructure the maturity profile of outstanding debt.
Switches are also a cash management tool, which will enable the government to mitigate rollover risk by smoothing the domestic debt maturity profile towards bond redemptions.
This switching also allows current holders of the source bond (maturing bond) to shift their investments into other longer-dated stocks well in advance and to avoid the risk of not getting an allotment of other stocks upon the maturity of the stocks.
The switching will be done in line with prevailing market yields for both the source and destination stock, the Bank announced.
erastus@thevillager.com
