Bank of Uganda's Upcoming Treasury Bond Auction on October 30
October 17, 2024
Friends,
The Bank of Uganda has announced the call for bid applications for this month's treasury bond auction. The upcoming bid notification includes three bonds: the 2-year bond with CUSIP UG12G0907265, the 5-year bond with CUSIP UG0000001533, and the newly launched 15.8% coupon rated 15-year Treasury Bond with CUSIP UG12K2306393.
(The 5 year bond has a 10% withholding tax, for those who want to invest in medium term but still pay lower taxes)
In this round, with three bonds, the Bank of Uganda is looking to raise approximately UGX 990 billion or close to one trillion UGX at the back of raising over UGX 600 billion in the previous Auction at the beginning of the Month.
Our focus is on the new 15-year treasury bond maturing in 2039, which was introduced to the Market at Par of 15.8% in the July 2024 Auction a rate market monitors felt was lower than anticipated, and last Auctioned in September at the yield of around 16.5%.
With the recent moves by the Bank of Uganda to lower the CBR to 9.75% and the last Bond Auction that led to an acceptance of lower bids than the call, has led to the yields across the different tenors to drop in the secondary market. Will this be the same for the Auction at the end of the Month?
For those planning to invest, it is crucial to fill out the correct CSD forms (CSD Form 2) to ensure that the banks submit your bids in time for next Month's auction.
The 5yr indicates a 20% WHT in the image therein but you have written a 10% WHT. Please clarify