The market had no appetite for the last variable rate bond issued by the finance ministry, taking up only $1.88 billion of the unlimited offer.

The long-term instrument locks in investors' money for 20 years at WATBY plus 1.625 per cent, and is set to mature on August 11, 2026.

Today, the finance ministry, in a switch of tactics, will place a fixed 12.875 per cent debenture on the market, which will be on sale for four days to August 28.

The debenture has a short tenure of two years, and is subject to the withholding of taxes.

The initial interest payment on the VR bond is fixed for six months at 12.81 per cent, after which payments will vary according to the prevailing six-month Treasury bill rate, plus a reset of 1.625 per cent.

The six-month T-bill rate is now running at 12.81 per cent, the yield in July.

New T-bill issued

A new T-bill was issued yesterday.

The finance ministry has had strong subscriptions to previous VR bonds this year, with uptakes ranging as high as $10.5 billion in June.

The issue on July 28 was also a long-term bond with a 16-year tenure, but had good results, earning the treasury just under $8.6 billion.

The results of another 8-year VR bond priced at WATBY plus 1.5 per cent and issued August 16 were not yet available.

The debt issues are to finance the budget. Finance minister Dr. Omar Davies plans to raise $112 billion from domestic loans this fiscal year.