Bonds are long term debt instruments issued by the Central Bank of Swaziland on behalf of the Government of Swaziland. Bonds are issued by Government to raise long term funds and for deficit financing. The Government also issues bonds in order to develop the domestic capital market as they provide additional investment avenues for both institutional and individual investors.
These instruments usually have a maturity longer than one year, with the current series of bonds in issue having maturities ranging between three (3) and ten (10) years. Bonds may be referred to as fixed income securities as they normally pay a fixed interest amount, referred to as the coupon. The coupon is paid at regular intervals and the principal amount is repaid at maturity. Government bonds issued in the local market pay a coupon semi-annually (every six months).
Bonds are issued in the primary market through an auction either at an initial public offering (IPO) or through the re-opening of a Bond series currently in issue. The auction is open to institutional and individual investors. Institutional bids must be submitted in multiples of E1million subject to a minimum bid of E1million. Bids by individuals must be in multiples of E1,000.00 subject to a minimum bid of E10,000.00 All bids must be submitted through Primary Dealers. Currently, the participating Primary Dealers are the four local commercial banks being; FNB Swaziland, Nedbank (Swaziland) Ltd, Standard Bank Swaziland Ltd and Swaziland Development and Savings Bank.
Bonds are tradable in the secondary market, and can thus be sold before maturity. The above listed Primary Dealers are responsible for creating a secondary market in Government bonds, from which investors can buy or sell these securities.
Central Bank of Swaziland
Mbabane, Swaziland (H100)
Tel: [+268] 2408 2000
Fax: [+268] 2404 0063