Treasury bills (T-bills) are short-term marketable debt instruments issued by the Central Bank of Swaziland on behalf of the Government of Swaziland. They are issued with maturities of 91, 182, 273 and 364 days.
Treasury Bills are issued under the provisions of The Treasury Bills and Government Stocks Act, 1994 (as Amended), which sets a domestic debt ceiling for the Ministry of Finance at 25 percent of GDP as enshrined in the Treasury Bills and Government Stocks (Amendment) Act, 2010. The Central Bank, as a fiscal agent for the Government, is charged with raising funds in the domestic market. Treasury Bills issued under this Act are exempt from withholding tax, stamp and transfer duties.
The Government of Swaziland issues T-bills for the purpose of deficit financing, and to meet short-term cash flow obligations. The Government also issues T-bills in order to develop the domestic money market as they provide additional investment avenues for both institutional and individual investors.
The Central Bank of Swaziland on behalf of the Government of Swaziland issues treasury bills on a weekly basis. The auction typically takes place on a Wednesday, unless otherwise stipulated. Auctions are open to all bidders, which includes commercial banks, non-bank financial institutions, stockbrokers, and corporate and individual investors. Non-residents are also eligible to participate.
Treasury bills are offered at an auction on a competitive and non-competitive bid basis.
Competitive bids are submitted by institutional investors, with a minimum amount of E5million, in multiples of E1million. Bids must show the amount and discount rate expressed at an annual rate to three decimal places.
Individuals submit bids on a non-competitive basis, where applications must be made for a minimum amount of E10,000.00 and thereafter in multiples of E1,000.00. Non-competitive bids should specify only the amount of the bid. Non-competitive bids are applications in which bidders receive the average discount rate, which is determined by the accepted competitive bids at the auction.
Treasury Bills are issued at a discount, that is, they are sold at a price less than their face (par) value. At maturity, the Government will pay the holder the full face value of the bill. Therefore, the interest earned on a Treasury Bill held to maturity is the difference between the purchase price of the paper and its face (par) value.
Investors can contact any of the Primary Dealers to make an application. All bids must be submitted through a Primary Dealer for further submission to the Central Bank of Swaziland. Currently, the Primary Dealers are Nedbank (Swaziland) Ltd, Standard Bank Swaziland Ltd, First National Bank of Swaziland (FNB) and Swaziland Development and Savings Bank (Swazi Bank).
For further information: please see the attached Treasury Bills Framework
Central Bank of Swaziland
Mbabane, Swaziland (H100)
Tel: [+268] 2408 2000
Fax: [+268] 2404 0063