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Mozambique Stock Exchange (BVM) Can Place Another 1.5B in Treasury Bonds By Year End

Mozambique Stock Exchange (BVM) Can Place Another 1.5B in Treasury Bonds By Year End

Mozambique placed more than 6.1 billion meticais in a single Treasury Bond issue through the Mozambique Stock Exchange (BVM) on 10 October, reaching 96% of the limit set for 2023.

According to BVM data to which Lusa had access this Monday (16), the issue involved an operation for direct subscription by Specialised Treasury Bond Operators (OEOT) of up to 6.1 billion meticals – which was completely filled – relating to the ninth series of 2023 Treasury Bonds, carried out by securitisation and not by auction, as in previous operations.

This is an operation to issue 61.6 million registered bonds, each worth 100 meticais, maturing in six years, with interest payments of 18% per year until October 2025 and a variable rate in the following four years.

To this end, Mozambique has already placed 35.1 billion meticais in Treasury Bonds through BVM since January, with the legal availability to issue a further 1.5 billion meticais by the end of the year.

According to decree 14/2023, issued by the Ministry of Economy and Finance on 18 January, the issue of Treasury Bonds (OT) – public debt issued with longer maturities – for this year provides for an overall limit of 36.6 billion meticais, preferably in two monthly issues, until 5 December.

Meanwhile, BVM data indicates that 15 issues have already been made – including reopenings of scheduled issues – in 2023, with maturities of up to ten years and interest ranging from 17% to 19%, having so far reached almost 96% of the legal limit for OT debt for this year.

The amounts raised in each operation ranged from 475 million meticais on 8 August to 5.9 billion meticais in the auction operation held on 7 March.

The Mozambican government previously approved the so-called Public Debt Management Strategy 2023-26, which guides debt options over the next few years, in order to “set limits for debt sustainability indicators when contracting loans”.

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In terms of external debt, the Executive plans to “prioritise financing in the form of donations” and “in the form of highly concessional credits for profitable projects”, while in terms of domestic debt the priority will be to “prioritise the issue of long maturity Treasury Bonds”.


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