Swaziland issues first 3-year Government debt, raises $34 million

The Central Bank of Swaziland (www.centralbank.org.sz) on 27 August sold the first longer-term Government bonds to raise money for development projects. It plans further sales this year, a central bank official told Bloomberg news agency. Bloomberg quotes Phumzile Mkhatswa, a domestic debt officer at the bank, as saying: “Yesterday was the first time the central bank has released a 3-year bond. We plan to issue 5-year and 10-year bonds before the end of this year.”
The Central Bank sold 250 million elangeni ($34.2 million) worth of three-year bonds with an 8% coupon. Previously the bank had only sold short-term Treasury bills with regular auctions of 28- and 56-day bills. Although interest rates are often lower than in South Africa, which surrounds the kingdom of Swaziland, the Treasury bills are often oversubscribed. Bloomberg reports there were 383.2 million elangeni of Government debt outstanding in June. Yesterday’s bond sale attracted 519 million elangeni in bids, the central bank said.
According to Bloomberg, Mkhatswa said, without providing further details, the bonds are “intended to raise money for the Kingdom of Swaziland’s development projects.”
The Swaziland currency is the lilangeni (plural elangeni), pegged to the South African rand at parity. Current debt listings on the Swaziland Stock Exchange (www.ssx.org.sz) include 2 Government debt securities listed, both expiring in 2010, as well as corporate bonds from Newera Partners, Inyatsi Construction and Standard Bank SD. Only the Standard Bank bond has any duration, and expires in 2019, while maximum duration of the other bonds is 2012.
Equity listings are: Nedbank Swaziland, Royal Swaziland Sugar Corporation, Swazispa Holdings, Swaziland Property Investment and Swaziland Empowerment.

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