19 March 2009
1. The National Treasury will subject to market appetite, switch the
R153
government bond with a coupon of 13,0% maturing on 31 August 2010.
2. The switch auction will be conducted on 26 March 2009.
3. The destination bonds for the auction are the:
* R206 (7,50%: 2014)
* R208 (6,75%: 2021)
* R186 (10,50%: 2026)
The terms and conditions of the R153 (13,0%: 2010) switch auction are
as
follows:
4. Methodology: The switch auction will be on a cash neutral basis and an
all in pricing method is applicable. However, bids will be submitted in terms
of yield.
5. Participation: Although the switch auction is on a voluntary basis, only
primary dealers are eligible to participate.
6. The National Treasury reserves the right to decide the maximum amount to
be
switched.
7. The source bond for this auction is the R153 (13.0%: 2010) and the
destination bond is the R206 (7,50%: 2014), R208 (6,75%: 2021), and R186
(10,50%:2026).
8. Participants should switch from the source bond into the applicable
destination bond mentioned above.
9. The switch auction will be conducted on a multiple yield / price basis
(American style).
10. Participants should submit their bids for the destination bond at
competitive yields.
11. Participants should submit their offers to switch a nominal amount of
source bonds, at the released indicative yield, into the destination bond.
12. Offers to switch out of the source bond (R153) should be for a minimum
nominal amount of R10 million and thereafter in multiples of R5 million.
13. Settlement will be on a T+3 basis.
14. The applicable times on the day of the auction are as follows:
* Auction start: 10h00
* Auction close: 10h30
* Results: 11h30
15. An indicative yield for the source bond will be published at 09h30 on
the day of the auction on Reuters, Bloomberg and the South African Reserve Bank
(SARB)âs website.
16. Handling of odd-lots:
16.1 A facility is available to successful participants to top up any odd-lots
of the destination bonds allotted to the nearest R1 million.
16.2 The top-up amounts will be sold to the participants at their respective
allotted yields / prices.
16.3 This facility will be available until 12h00 on the following business day
and the SARB dealing desk can be contacted in this regard.
16.4 Odd-lots will settle on a T+2 basis.
For further information contact:
Phumzile Maseko
Tel: 012 315 5610
Anthony Julies
Tel: 012 315 5415
Issued by: National Treasury
19 March 2009
Source: National Treasury (http://www.treasury.gov.za)
