GOVERNMENT has extended the issuance period of the COVID-19 bond to December 31, 2020, to allow for more time to realise the targeted amount of K8 billion.
According to a notice issued via the Bank of Zambia (BoZ), government has extended the issuance period of the COVID-19 bond to December 31, 2020, to allow for more time for the bond to be fully subscribed.
BoZ acting assistant director for communications Besnat Mwanza revealed that so far, the Bond had achieved a subscription rate of over 72 per cent, translating to around K5.76 billion.
“The Ministry of Finance and NOT the BoZ extended the issuance period to December 31. The extension has been made in order to realise the target amount announced for the COVID-19 Bond Issuance Programme of K8 billion. The COVID-19 Bond Issuance Programme has so far recorded a subscription rate of 72.12 per cent, indicating good subscription. With the extension, it is expected that subscription will be covered adequately,” Mwanza stated in response to a press query.
And she expressed confidence that the Bond would be fully subscribed by the end of the issuance period.
“As indicated, the COVID-19 Bond Issuance Programme has so far recorded a subscription rate of 72.12 per cent, indicating firm subscription and, therefore, the Bank has confidence that it will be fully subscribed by the target date,” stated Mwanza.
The central bank started inviting applications for the issue of a COVID-19 Bond worth an initial K2.67 billion, whose proceeds were earmarked to be utilised in mitigating the negative impact of the pandemic on economic activities.
Subsequently, in announcing the extension on September 22, it stated that the ammount of bonds available on offer was K2.33 billion at cost, and will be issued under a five, seven, 10 and 15-year maturity tenure.
According to the extension notice, the minimum value of each offer will be K500,000 at cost for both domestic and foreign investors, and that the pricing of the bonds will be market-based and will be benchmarked against the latest bond auction at the date of the bid application.
The Bonds will be sold on a first come, first serve basis from the time of publication of the September 22 notice until December 31, 2020, or upon realisation of the amount on offer.