INTRODUCTION WHAT ARE TREASURY BONDS? PARTICIPANTS IN THE TREASURY AUCTION • The maximum bid limitation Lesotho Treasury Bonds In an effort to develop the domestic SECURITIES MARKET Treasury Bills are auctioned every on the non-competitive bids These are securities offered market, the Central Bank of Lesotho, Who can invest in Securities two weeks and Treasury Bonds as is M99,900 per investor in any by Lesotho Government with on behalf of the Government of Market? per the approved auction calendar. issue. maturity of more than one year Lesotho, continues to undertake Treasury securities auctions are All auctions take place at the • Separate bid forms should be with the longest being 10 years. reforms that are aimed at open to individual investors (18 Central Bank of Lesotho and are completed for each tenor e.g. They are available in tenors that deepening the financial market in years and above), commercial banks, conducted on a Wednesday at 9:00 91, 182, 273 and/or 364 days. line with regional developments. the Government of Lesotho has non-bank financial institutions, a.m. while payment and settlement The Bank has developed these opened for issuance at a particular corporates and societies. Non- take place on the same day before TRADING METHOD rules and regulations to guide and time. Bonds are issued at either a residents are also eligible to close of business. The Central In the auction, bids are invited from inform all investors on the issuance discount, par or premium to their participate. The secondary market Bank of Lesotho issues annual individuals, groups and institutions. of Lesotho Government Securities. face value (meaning that an investor for securities exists and any person calendar for Treasury Securities Such bids are classified into may pay less, equal or more than who holds such securities is free to auctions which is available at the the par value and if held to maturity competitive and non-competitive WHAT ARE TREASURY BILLS? trade, exchange, pledge or transfer Bank’s website(URL:http://www. receives the par value). bids. Treasury Bills (T-Bill) are debt them in the market. centralbank.org.ls) or (www.msm. successful bids, will be suspended instruments issued by the org.ls . for a period of six months from COMPETITIVE BIDS Government in exchange for lending WHAT ARE TREASURY BONDS? PARTICIPANTS IN THE TREASURY investing in subsequent treasury APPLICATION TO BID These entail bids that are greater it money. They are short-term Lesotho Treasury Bonds SECURITIES MARKET securities offers. The Central Bank of Lesotho than or equal to M100, 000. They instruments, which mature in less These are securities offered Who can invest in Securities announces the amounts to be are applications in which a yield TAXATION than a year and can be negotiated by Lesotho Government with Market? offered, maturity dates for securities rate is specified. Thus, the success Is there any Tax Payable on and traded freely in the market. maturity of more than one year Treasury securities auctions are to be issued and settlement dates of of a bidder’s application depends Treasury Securities? Treasury bills are primarily intended with the longest being 10 years. open to individual investors (18 securities by issuing press releases 7 on other competitive bidders’ Withholding Tax is payable on to mop up/ inject liquidity in the They are available in tenors that years and above), commercial banks, days prior to every auction. Tenders yield rates. The lower the yield interest income earned from economy thereby reducing the the Government of Lesotho has non-bank financial institutions, for Treasury Securities auctions are rate the more likely the bid will be investment in treasury securities. inflationary pressure and are sold opened for issuance at a particular corporates and societies. Non- made by completing Government successful. The rates are 10% and 15% for on a discount basis – (i.e., they are time. Bonds are issued at either a residents are also eligible to of Lesotho Securities Bid Form Bids must show the amount of residents and non-residents sold originally at a price below their discount, par or premium to their participate. The secondary market (CBL/TBR/1) available at the Central tender and yield rate expressed respectively. The interest that is face value, with face value payable face value (meaning that an investor for securities exists and any person Bank of Lesotho and other branches as an annual rate to three decimal earned at maturity or as coupon at maturity). They are preferred by may pay less, equal or more than who holds such securities is free to of commercial banks in the country. places. payments will therefore be net of investors because they are backed the par value and if held to maturity trade, exchange, pledge or transfer The following information is withholding tax. by the government and constitute a receives the par value). Treasury them in the market. required on the form: risk free investment. Bonds make interest (coupon) NON-COMPETITIVE BIDS • Name of the Bidder DISINVESTMENT OF TREASURY payments semi-annually on the REQUIREMENTS FOR TRADING IN These are bids that are less than • Amount of Tender SECURITIES face value held during the life of TREASURY BILLS/BONDS M100, 000. In this category, bidders TYPES OF TREASURY BILLS • Security Type The Central Bank of Lesotho offers the bond. They can be used by the i. Individual investors are guaranteed allocation and they Currently there are four tenors of T-Bills a rediscounting facility through Government of Lesotho to finance • Investor’s identification (Valid • Maturity Period receive either the weighted average offered by the Government of Lesotho • Bid Price which it can buy back the treasury through the Central Bank of Lesotho. These identified capital projects, finance Passport or National ID) price or cut off price as determined • Bidder’s Bank and Settlement securities provided that 75% of are; the 91, 182, 273 and 364 days T-Bills government budgetary needs, and • Bank account held at any local by the accepted competitive bids. the maturity period has elapsed. respectively. for development of the domestic commercial bank Account Bidders must therefore state only However, the treasury securities debt market. ii. Societies the bid amount without specifying can be traded amongst investors. • Certificate of Registration All bids must be received by the the yield rate. • Society’s Constitution Central Bank of Lesotho prior to On the auction date, results for both ADVANTAGES OF INVESTING IN • Society resolution by members deadlines stated on the auction the successful and unsuccessful WHAT HAPPENS UPON MATURITY TREASURY SECURITIES to invest announcement. Late applications bidders are announced at 11:00 OF TREASURY SECURITIES? • They are risk-free investments • Bank account held at any local will not be accepted. a.m. Successful bidders are Upon maturity, the principal • The rate of return is competitive commercial bank expected to collect their “Awarded plus interest are deposited into • They can be pledged as ENQUIRIES CONCERNING FURTHER DETAILS • Identification of all signatories SPECIFIC BID REQUIREMENTS Advices” from the Central Bank of the investor’s bank account. For SHOULD BE DIRECTED TO: collateral Markets Operations iii. Company • For all securities, each bid must Lesotho and settle on the same day treasury bonds, coupon payments Financial Markets Department • They are transferable and Central Bank of Lesotho • Certificate of Incorporation / state the face value. (T+0) of the auction. Settlement are made semi-annually until the negotiable P.O. Box 1184 and redemption of the securities security matures. If an investor Maseru 100 Trader’s License • All bids must equal or exceed Tel: (+266) 2223 2143/ 2223 2103/ 2223 2423 • Bank account held at any local minimum threshold of M5, 000. is done through commercial banks. wishes to continue investing, then a Fax: (+266) 22 322 767 E-Mail: [email protected] commercial bank All bids must be in multiples of Thus, payment is not done in the new application has to be filled to Website: www.centralbank.org.ls • Identification of at most three M100. form of cash or banker’s cheques. re-invest the maturing amount. DISCLAIMER: signatories Investors, who fail to pay for their This brochure is for general information only and has no binding legal authority. Central Bank of Lesotho excludes any liability for any costs, losses, claims, damages, expenses, proceedings incurred or suffered by you arising directly or indirectly in connection with this brochure. SELELEKELA MATSETE A NAKO E TELELE (TREA- ii. Likhoebo Sephetho sa fantisi ka ‘ngoe se E meng ea mesebetsi ea Banka e SURY BONDS) • Lengolo la khoebo phatlalatsoa letsatsing lona leo kholo ea Lesotho ke ho batalatsa Ana ke matsete a nako e ka • Litokomane tsa boitsebiso tsa la fantisi, hona ho etsahala ka mabala le ho ntlafatsa mebaraka ea holimo ho selemo ho ea holimo. litho tse tekenang hora ea leshome le motso o mong lichelete kahar’a naha. Sena Banka A ka fumaneha ka mekhahlelo e • Polokelo ho e nngoe ea libanka hoseng (11:00 a.m.). Ba atlehileng e seetsa ka ho fana kapa ho rekisa fapaneng ho latela lithloko tsa iii. Mekhatlo fantising ba fumants’oa mangolo a matsete a ‘Muso. ‘Muso ka nako eo. Matsete ana • Lengolo le bontshang hore pakang hore ba se ba ena le matsete a fana ka phaello kappa tsoala mokhatlo o ngolisitsoe Bankeng e Kholo. Hang kamora ho MATSETE A NAKO E KHUTS’OANE makhetlo a mabeli ka selemo, ebe • Polokelo ho e nngoe ea libanka phatlalatsa ba atlehileng, chelete (TREASURY BILLS) ha letsete le butsoa motseteli o • Litokomane tsa boitsebiso tsa eo ba e tsetelang e huloa ho tsoa Ana ke matsete a nako e sa feteng boelloa ke chelete eohle eo a e litho tse tekenang polokelong ea motseteli ka mong le selemo kapa likhoeli tse leshome tsetetseng qalong. Chelete ena • Lengolo le ngotsoeng ke litho banka ea hae. le metso e ‘meli. Ka matsete ana, e sebelisoa ke ‘Muso mererong tsa mokhatlo Banka e fihlela e ‘ngoe ea lipehelo e meholo ea naha le ho tlatsetsa likhakanyong tsa lichelete. tsa eona eleng ea ho laola ts’ebeliso MOKHOA OA HO TSETELA LEKHETHO ea chelete kahara naha. Matsete Fantisi ea matsete a nako e Motseteli ka mong o lebeletsoe ho a na a fana ka phaello nakong eo MELEMO EA HO TSETELA khuts’oane e etsoa habeli ka khoeli, lefa lekhetho la tsoala ea chelete a butsoang, ‘me sethathong a MATSETENG A ‘MUSO ha ea matsete a nako e telele e eo a e tsetetseng. Ho motseteli eo rekisoa ka chelete e ka tlasana e le • Matsete ana a bolokehile ‘me etsoa ho latela lenane le fanoeng e leng moahi oa Lesotho ka molao, hore a tle a be le tsoala. Matsete ha ho monyetla oa tahlehelo. ke ‘Muso (Auction calendar). Fantisi lekhetho lena le nka linoko tse ana a bolokehile ebile a rekiseha • A ka fetisoa ho tloha ho li ts’oareloa Bankeng e Kholo ea leshome (10%) lekholong.. Ka ho ha bobebe. Ka hoo motseteli o na motseteli e mong ho ea ho e Lesotho ha ele Laboraro bekeng le leng ha motseteli ele moahi oa le monyetla oa ho a rekisa neng le mong ka bolokolohi ka hora ea borobong hoseng (9:00 naha e ‘ngoe kantle ho Lesotho, neng le pele a butsoa haeba ho na • A ka sebelisoa e le peheletso a.m.). Matsatsi a lifantisi a ka o lebeletsoe ho lefa linoko tse le tlhoko e joalo. molemong oa ho kopa fumaneha marang-rang leqepheng leshome le metso e mehlano (15%) mokitlane bankeng ha ho la Banka e leng; www.centralbank. lekholong. MEKHAHLELO EA MATSETE A hlokahala. org.ls kapa www.msm.org.ls. NAKO E KHUTS’OANE • Sekhahla sa tsoala sea Ha hona le fantisi, Banka e Kholo LIPOTSO LE LITLHAKISETSO LI KA Ha joale ho na le mekhahlelo hlamatseha papisong le matsete ea Lesotho e etsa khoelehetso LEBISOA HO: e mene ea matsete a nako e a ts’oanang mebarakeng ea ho sechaba mabapi le boleng ba Domestic Markets Operations khuts’oane. Matsete ao ke a likhoeli lichelete. matsete ao e fanang ka oona ‘moho Financial Markets Department tse tharo (91 days), tse ts’eletseng le matsatsi ao a tlang ho butsoa ka Central Bank of Lesotho (182 days), tse robong (273 days) le KE BO MANG BA NANG LE TOKELO oona matsatsi a supileng pele ho P.O. Box 1184 tse leshome le metso e ‘meli (364 EA HO NKA KAROLO MATSETENG fantisi. Motseteli o tlatsa foromo ea Maseru 100 days). A ‘MUSO? boiketo (CBL/TBR/1) e fumanehang Tel: (+266) 2223 2143/ Motho e mong le e mong o Bankeng e Kholo le makaleng 2223 2103/22232423 Matsete ana a fantisoa habeli lokolohile ho ba le kabelo matseteng a mang a libanka kahar’a naha. Fax: (+266) 22 322767 ka khoeli, ha batseteli bona ba a ‘Muso ha fela a fihlela lipehelo tsa Chelete e ka tlase e ka tseteloang E-mail: cblsecurities@centralbank. lumeletsoe ho iketa ka linako tsohle. fantisi. Ekaba batho ka bo-mong ke likete tse hlano tsa maloti (M5, org.ls (matsoalloa kapa ba-lichaba), 000.00). mekhatlo, likhoebo hammoho le libanka tse teng ka hare ho naha. MOKHOA OA THEKISO LITOKOMANE TSE HLOKAHALANG Ho na le mekhahlelo e ‘meli ea BAKENG SA HO TSETELA; batseteli, oa ba hlolisanang le oa i. Motho ka mong ba sa hlolisaneng. Ba hlolisanang ka • Litokomane tsa boitsebiso sekhahla sa tsoala ke ba tsetelang ho (Passport kapa National ID) tloha ka likete tse lekholo tsa Maloti • Polokelo (bank account) ho e (M100, 000), ha ba sa hlolisaneng ‘ngoe ea libanka tse teng ka ele ba tsetelang ho qala ka likete tse har’a naha tse tlas’a bolisa ba hlano tsa Maloti (M5,000) ho fihlela Banka e Kholo ho e ka tlaase ho likete tse lekholo tsa Maloti.