Treasury Bills and Bonds
Invest in Botswana Government issued Bonds and Treasury Bills.
Government Bonds explained
Bonds are debt instruments where the borrower - in this case the Government of Botswana - issues paper to the market.
The example below shows the six Bonds and Treasury Bills currently on issue by the Botswana Government.
| BOND NAME | ANNUAL INTEREST RATE(COUPON) | MATURITY DATE | YIELD TO MATURITY(YTM) | PRICE PER 100 |
|---|---|---|---|---|
| TBILL | 10 JUN 2015 | 1.90% | 99.938 | |
| TBILL | 09 SEP 2018 | 2.70% | 99.244 | |
| BW003 | 10.25% | 31 OCT 2015 | 3.60% | 103.54208 |
| BW005 | 10.00% | 12 SEP 2018 | 4.55% | 118.57660 |
| BW007 | 8.00% | 10 MAR 2025 | 5.65% | 119.20236 |
| BW008 | 7.75% | 08 SEP 2020 | 5.20% | 113.35204 |
| BW010 | 7.75% | 14 MAR 2015 | 4.30% | 107.48475 |
| BW011 | 7.75% | 10 SEPT 2031 | 5.95% | 120.27788 |
If the bond is held to maturity, the investor will receive P10 000.00 plus P512.50 on 31/10/2015. This excludes all the other coupons they would have received before the bond matured.
The example below shows the six Bonds and Treasury Bills currently on issue by the Botswana Government.
| BOND NAME | ANNUAL INTEREST RATE(COUPON) | MATURITY DATE | YIELD TO MATURITY(YTM) | PRICE PER 100 |
|---|---|---|---|---|
| TBILL | 10 JUN 2015 | 1.90% | 99.938 | |
| TBILL | 09 SEP 2018 | 2.70% | 99.244 | |
| BW003 | 10.25% | 31 OCT 2015 | 3.60% | 103.54208 |
| BW005 | 10.00% | 12 SEP 2018 | 4.55% | 118.57660 |
| BW007 | 8.00% | 10 MAR 2025 | 5.65% | 119.20236 |
| BW008 | 7.75% | 08 SEP 2020 | 5.20% | 113.35204 |
| BW010 | 7.75% | 14 MAR 2015 | 4.30% | 107.48475 |
| BW011 | 7.75% | 10 SEPT 2031 | 5.95% | 120.27788 |
If the bond is held to maturity, the investor will receive P10 000.00 plus P512.50 on 31/10/2015. This excludes all the other coupons they would have received before the bond matured.
Treasury Bills trade on a discount yield basis.
Currently there are two Treasury Bills in issuance by government.
Treasury Bills do not have a coupon or interest rate like Bonds.
How to calculate the return on investment
Using the example below, where the Treasury Bill discount rate is 61.90%, the price translates to 99.938.
| BOND NAME | ANNUAL INTEREST RATE(COUPON) | MATURITY DATE | YIELD TO MATURITY(YTM) | PRICE PER 100 |
|---|---|---|---|---|
| TBILL | 10 JUN 2015 | 1.90% | 99.938 | |
The investor will pay (P10 000.00 x 99.938%) = P9, 993.80.
On maturity the investor will receive P10 000.00. The difference of P6.30 will represent the return on the Treasury Bill investment.
The Bonds/ Treasury Bills are dematerialised at the Bank of Botswana and are traded on a paperless ownership system.
The buyer will be given a confrmation note from FNB Botswana stating that we hold the Bonds/ Treasury Bills on his/her behalf in custody.
Non-FNB customers will have to meet all KYC (know-your-customer check done by the bank) requirements before any transaction is done on their behalf.
Invest in Botswana Government issued Bonds and Treasury Bills.
Bonds are debt instruments where the borrower - in this case the Government of Botswana - issues paper to the market.
