THE Bank of Tanzania, as a fiscal agent of the Government of the United Republic of Tanzania, would like to inform the public and investors of Treasury bonds on the change in coupon rate determination approach, beginning January 2025.
The change aims to align coupon rates with the prevailing market conditions, thus enhancing the liquidity of the bonds, price discovery, and market efficiency.
This is pivotal for financial market development in Tanzania. Prior to this change, coupon rates on Government bonds, once set, remained unchanged for multiple auctions over aconsiderable period, leading to misalignment with prevailing market conditions.
Under this approach, the Bank will continue to conduct Government securities auctions as per the published Issuance Calendar.
The applicable coupon rate for a particular bond auction will be published on the respective call for tender at least one week before the auction date on the Bank of Tanzania website, newspapers and social media platforms.
Due to this change, the coupon rate will no longer appear on the Issuance Calendar.
Please be advised that the modality of participation in the government bond auctionsremains the same.
Investors will continue to participate through Central Depository Participants (CDP), including banks licensed under the Banking and Financial Institutions Act and Dealers licensed under the Capital Markets and Securities Authority Act.
The changes will not affect Treasury bonds issued before January 2025.
