Tanzania's latest Treasury bond is oversubscribed
Tanzania's latest 15-year bond issue was well received on financial markets, being oversubscribed by 140.3 per cent.Tanzania's latest 15-year bond issue was well received on financial markets, being oversubscribed by 140.3 per cent.
During the auction conducted by the Bank of Tanzania (BoT) on Wednesday (November 13th), the total amount tendered reached Sh36.08 billion (€16.5
million), while Sh15 billion was originally sought. The sum will be used to finance several infrastructure projects, Tanzania Daily News
BoT's Deputy Governor Juma Reli said that the financial sector's deepening and economic expansion has created the need for
long-term debt instrument beyond ten years: "In order to address this demand the government found it important to issue a 15-year bond".
His colleague, BoT's Director of Economic Research and Policy Joseph Masawe, added that the bond represents a "significant milestone" as it has a 15-year maturity and offers
opportunity for the government to raise money for long term infrastructure development.
He said the auctioning of the long term debt instrument was a first step and that the BoT is currently studying market behaviour before deciding to issue other long term bonds of 20 to 30 years.
In September, Tanzania has asked the International Monetary Fund (IMF) to increase its debt ceiling by about $300 million for the 2013-2014 fiscal year, so it can issue $1 billion (€755 million) worth of bonds on international markets.