By Investors submitted P576.45 million of bids in Botswana’s government bond switch on Sept. 4, with the strongest demand directed at the BOTSGB0929 note maturing in September 2029, according to results published by the Bank of Botswana.
The auction covered three source bonds with a combined P1 billion offered. Bids reached P62.45 million for the 5.50% note maturing in May 2027, P308 million for the 4.80% note due in September 2029 and P206 million for the 7.75% note maturing in September 2031. All bids received were switched, the central bank said in its results table.
The 2029 line attracted the largest bid amount, but it was not fully subscribed against the P200 million offered. The 2031 note received P206 million against P400 million offered, while the 2027 note drew P62.45 million against P400 million offered. The results show demand concentrated in the middle maturity rather than spread evenly across the three lines.
Stop-out yields were 12.900% for the 2027 source bond, 12.700% for the 2029 line and 12.500% for the 2031 line. Weighted average yields were 12.727%, 12.597% and 12.500%, respectively. The auction had two bids for the 2027 bond and three bids for each of the longer bonds, with every bid successful.
The switch ratios show how much destination-bond face value investors received for each source holding. The ratios were 1.04397 for the 2027 note, 0.91977 for the 2029 note and 1.89108 for the 2031 note. The destination allocations were P64.394 million and P281.194 million into BOTSGB1150, an 11.80% bond, and P389.562 million into BOTSGB0943, a 5.30% bond.
Settlement is scheduled for Sept. 9. The operation changes the maturity and coupon mix of the holdings exchanged, while the published results do not disclose the identities or investor categories of successful bidders.
For Botswana’s domestic debt market, the outcome offers a limited but useful read on where investors were willing to reposition within government paper. The P308 million bid total for the 2029 source bond was the only amount above the face value offered for that line, although the switch format means the result cannot be read as a conventional cash auction or as a direct measure of new borrowing demand.
The source bonds carried coupons of 5.50%, 4.80% and 7.75%, while the destination securities carried coupons of 11.80% for BOTSGB1150 and 5.30% for BOTSGB0943. Coupon comparisons alone do not describe the economics of the exchange because the switch ratios and the destination prices also determine the face value allocated. The Bank of Botswana reported indicative prices of 100.24138 for the 2027 source bond, 89.59161 for the 2029 source bond and 94.26834 for the 2031 source bond.
The 2029 source bond had the lowest weighted average yield of the three at 12.597%, narrowly below the 12.727% recorded for the 2027 bond. The 2031 bond cleared at 12.500%, with the lowest and highest bid yields both at that level. That may reflect the small number of bids, but the official release does not provide enough information to draw a broader conclusion about the market’s yield curve.
Investors and dealers will next see the settlement mechanics rather than a new price discovery event. The published table records the nominal source amount switched and the destination amount allocated, but it does not give a breakdown of bids by institution, the cash value of any settlement adjustments or subsequent trading levels. Those gaps matter when assessing whether the operation changed the composition of demand or simply moved existing positions between maturities.
Botswana’s bond market is relatively small compared with the large sovereign markets elsewhere in Africa, so individual switch operations can produce a clearer signal about available liquidity while still requiring caution. In this case, the official data support a narrow conclusion: demand was strongest for the 2029 source bond, all submitted bids were accepted, and settlement will move exchanged holdings into two destination securities on Sept. 9.
