Uganda's new 25-year Treasury bond has made a dramatic debut, surprising market insiders with a lower-than-expected yield. This move appears to be a deliberate attempt by the government to manage its rising debt costs.
Typically, longer-term bonds offer higher returns to compensate investors for the increased risk. However, the 25-year bond's pioneer auction recorded a yield of 16 percent, which is lower than the 17.65 percent yield on the existing 15-year bond and the 17.5-17.9 percent yield on the 20-year bond trading in the secondary market. This is a significant departure from traditional yield curve pricing trends.
