RESERVE Bank of Zimbabwe (RBZ) Wednesday issued a $1,55 billion Treasury Bond (TB) to support ongoing government programmes.
TBs are instruments of indebtedness issued by the governments to back up government spending and they generally include a commitment to pay interest as well as the face value on the maturity date.
“RBZ hereby invites investors, including but not limited to pension and provident funds, insurance companies, mutual funds, commercial banks and other interested institutions as well as individuals in Zimbabwe, to subscribe for the abovementioned bond,” the central bank said in a statement.
“The purpose of the loan facility is to assist in financing of the Government of Zimbabwe programmes. Under the arrangement interest is payable at the central bank half-yearly on the following dates: 20 February and 20 August until maturity of the bond to the registered bondholders through the nominated Custodian bank. The Bond will be redeemed at par in Zimbabwean dollars at the RBZ on the maturity date. Transfer of the bond must be done through registered custodians who hold accounts within the Central Securities Depository at the central bank,” the bank said.
The acceptance of applications started at 8:00 am on Wednesday, August 11, 2021 and will close on August 18, 2021 at 11:00 am.
“Applications must be for not less than $1 000 000 nominal value of the bond. The Bank reserves the right to reject any application or part thereof,” it said.
The emergence of the Covid19 pandemic coupled with a slowdown in economic activities continues to affect the smooth flow of revenues for governments the world over, prompting the need to explore alternative sources of revenue in the interim.