Historic record: 25-year T-bonds attract over 1tri/-

DAR ES SALAAM: BANK of Tanzania’s auction of 25-year Treasury Bonds saw an overwhelming response, with bids exceeding the offer by nearly five times, a record-breaking moment in the nation’s securities market.

The government wanted to raise 264.31bn/- through the 25 years bond, but the amount tendered rose to 1.23tri/-.

The Central Bank took exactly 264.31bn/- in successful bids, precisely matching the amount offered and resisted the temptation to absorb more liquidity, even at favourable pricing. The strong oversubscription of the 25-year Treasury Bonds signals heightened investor confidence in Tanzania’s economic future and government policies.

It reflects trust in the country’s ability to manage long-term debt obligations and offers a positive outlook for the macroeconomic environment.

Alpha Capital Head of Business Development and Customer Service, Mr Geofrey Kamugisha said the historic oversubscription occurred despite the Central Bank having materially cut the coupon from 15.75 to 15.00 per cent.

“As expected in this rate-downcycle, investor sentiment has aligned with the Central Bank’s easing stance but the demand far exceeded even my most optimistic expectations,” he said.

Mr Kamugisha said this reinforces the message that the Bank is not only steering yields, but also the pace of liquidity absorption in the market.

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The weighted average yield to maturity came in at 14.4239 per cent, down 37.39 basis points from the prior 25-year auction on 4th June (14.7978 per cent). Of the 939 bids submitted, only 79 were successful, a reflection of both competitive bidding and the scarcity premium now attached to long-duration paper.

According to Tanzania Securities Limited (TSL) Dar es Salaam Stock Exchange (DSE) Weekly Report said the 25 years bond the auction itself exceeded expectations, with bids more than three times the offer size, signalling strong demand for long-term government securities.

This surge in bond demand compressed yields but led to a decline in secondary market turnover.

On his part, the Advisory and Research Manager at Zan Securities Mr Isaac Lubeja said the auction marks the first issuance of the 25-year Treasury bond in the 2025/26 fiscal year, following the release of the updated auction calendar for the first half of the year.

The acceptance of over 1.2tri/- in bids, which is a record high for this instrument, demonstrated strong demand despite the lower coupon.

“Investor participation remained robust, with the auction posting a high subscription rate of 464.85 per cent,” he said.

Compared to trends in other East African markets, the oversubscription of Tanzania’s 25-year bond places the country ahead in attracting long-term capital. It shows Tanzania’s growing appeal as a regional investment hub for stable, long-duration instruments.

This strong performance not only enhances Tanzania’s reputation among institutional investors but also sets a benchmark for future sovereign issuances in the region. It demonstrates the market’s capacity to absorb large, long-term instruments and signals confidence in the country’s fiscal and economic trajectory.