On Wednesday, October 14, the Malian Treasury retained 33 billion CFA francs at an auction of treasury bills and bonds, exceeding its initial target by 3 billion, according to a report from UMOA-Titres.
Investors bid 64.355 billion CFA francs for the 30 billion sought, a coverage ratio of 214.52%. The State accepted slightly more than half of the offers. Settlement of the operation is set for October 15.
The main tranche covers bonds redeemable in October 2029. It accounts for 23.29 billion CFA francs retained, with a weighted average yield of 7.78%. The annual coupon on these securities is 6%, while their average purchase price stands at 95.3962% of their nominal value.
Mali also retained 7 billion CFA francs in 364-day bills, with an average yield of 4.67%, and 2.71 billion in bonds maturing in September 2031, at an average yield of 7.63%. The latter carry a coupon of 6.2%.
The price paid explains the gap between coupon and yield for the bonds. Both lines were subscribed below their nominal value. The coupon indicates the annual interest earned on that nominal value, whereas the yield also takes into account the purchase price and the time remaining until redemption.
This auction finances the State’s budget needs. It completes the issue announced at the start of October, which combined a short-dated maturity in October 2027 with two longer-dated lines.