Guidelines for the Primary Market Issuance of Government of Sierra Leone Treasury Bonds

GUIDELINES FOR THE PRIMARY MARKET ISSUANCE OF GOVERNMENT OF SIERRA LEONE TREASURY BONDS SEPTEMBER 2026

1. INTRODUCTION
   a) Authorisation
   In exercise of one of its functions as provided in sections 5(2)(b) of the Bank of Sierra Leone (the Bank) Act, 2019, which states that the Bank shall "act as banker, adviser and fiscal agent of the Government," and section 65(1) of the aforementioned Act, the Bank hereby issues the following Guidelines:
   b) The Central Securities Depository/Scripless Securities Settlement System (SSSS) The CSD is a key component of the Bank of Sierra Leone’s National Payments System, which manages the life cycle of Government of Sierra Leone (GoSL) treasury securities and is linked to the Real Time Gross Settlement System (RTGS). This facilitates real time settlement and clearance of all Government securities transactions on a Delivery Versus Payment (DvP) principle, where both the securities and the funds are simultaneously settled with finality. c) Primary Dealers Following the signing of the Primary Dealership Agreement, all Commercial Banks shall be eligible to act as Primary Dealers (PDs) and shall perform the following functions:

• provide liquidity to the market by quoting effective one-way rate for
  Treasury Bonds for outright purchases and sales;
• purchase the undersubscribed portions in auctions;
• participate actively in the Treasury Bonds issuance programme;
• actively contribute to the development of the Treasury Bonds market;
• adhere to their obligations as stipulated in the Primary Dealership
  Agreement.

2. THE AUCTION COMMITTEE
   The Auction Committee shall be chaired by the Bank and shall comprise five officials from the Bank and one from the Ministry of Finance. The Committee discusses auction outcomes, takes final decision on the auction and also confirms all auction results. The Committee reserves the right to increase or decrease the offer amount by not more than 10 percent, and also to accept or reject bids without assigning any reason. However, the percentage may be varied based on government’s funds’ position.
3. PRIMARY MARKET ISSUANCE
   a) Auction Calendar
   An Auction Calendar prepared by the Ministry of Finance (MoF) shall be published from time to time. Pre-announcing the issuance of Treasury Bonds reflects the Bank’s desire for greater transparency and accountability. It also enables market players to effectively plan their investment in Government securities.

Auctions for Treasury Bonds shall be conducted on dates determined by the Ministry of Finance. b) Announcement A press release calling for bids shall be published on the Bank’s website and the local news media at least six days prior to each auction. An announcement is also published electronically through the Central Securities Depository (CSD) system at least two days prior to each auction session for the information of commercial banks. c) Submission of Bids Commercial Banks can submit their bids on behalf of themselves electronically through the CSD Platform held at the Bank of Sierra Leone, not later than 16:00hrs GMT a day prior to the auction. NASSIT shall submit their auction bids signed by the authorised signatories in a sealed envelope, addressed to the Director of Financial Markets Department and marked on the outside “Treasury Bonds Auction Bid(s)”. All bids shall be delivered to the Bank not later than 16:00hrs GMT a day prior to the auction. d) Bid Format Each bid submitted shall be a minimum face value of NLe5,000.00 (Five Thousand Leones) and thereafter in increments/multiples of NLe500.00 (Five Hundred Leones).

Bids shall be quoted in rates of not more than two decimal places (e.g. 8.00%, 4.5%, and 10.46%). e) Auction Allocation The auction shall be conducted using the single rate auction format. This implies that each successful bidder is allocated Treasury Bonds at the rate that clears the market. In addition, more than one bid per participant shall be allowed but at different rate. Bids shall be allotted in ascending order from the lowest to the highest bid rate that clears the amount put on offer. f) Oversubscription If an auction is oversubscribed, the decision to supply the total amount demanded is dependent upon the provisions available to the Auction Committee to accept or reject bids.

g) Undersubscription
On occasions where the market demands less than the full amount offered in the auction announcement, the undersubscribed amount may be redeemed by Government or issued to the commercial banks on a pro-rata basis. h) Eligible Participants Only commercial banks and the National Social Security Insurance Trust (NASSIT) shall be eligible to participate in the primary auction for Treasury bonds. i) Registration of Participants All commercial banks shall be registered in the CSD by the Bank, to obtain a unique identification number and a securities account number. j) Competitive Bids Participants shall only submit bid in the competitive window. Bids shall be allotted with Treasury Bonds only at the rates that clear the market as long as the rate quoted on the application falls below or equals to the clearing rate. If bids at the cut off rate exceed the face value of the remaining amount on offer, the remaining amount shall be prorated and allocated accordingly to bids at the cut off rate until the amount offered for sale is exhausted. k) Responsibility for Payment The responsibility to pay the face value for Treasury Bonds awarded in an auction rest solely on the bidder. Participants shall therefore ensure that their accounts are adequately funded on the auction date. l) Auction Results Primary Dealers shall be able to view their successful bids on the CSD System upon completion of the auction. Results of other participants who are Non￾Primary Dealers shall be delivered to the respective institutions not later than the day following the auction. The results of auctions shall also be announced on the local media and on the Bank’s web site (www.bsl.gov.sl). The auction results shall include:

• Total amount supplied/issued at the auction;
• Highest Bid Rate;
• Lowest Bid Rate;
• Clearing Rate;
• Date of next issue and maturity;
• Terms of coupon payment;
• Offer Amount at next auction.
  m) Auction Postponements
  The Bank reserves the right to change the bidding cut-off time or postpone an auction at any time, should any circumstance impair the integrity of the auction process.

If an auction date falls on a public holiday, the auction shall be conducted on the next Business Day, but the issue shall remain the same. An auction could also be postponed in the event of technical failure, natural disaster. n) Redemption of Security On maturity, investors shall be paid the face value and last coupon (face value and interest) of treasury bonds purchased at auction. The Bank shall credit the accounts of all commercial banks through the SSS System on real time basis.
4. SETTLEMENT
a) Settlement Rate
The settlement rate for Treasury Bonds is calculated as follows; Settlement rate = Face Value Example, if bid rate is 5.00% and face value bid is 1,000,000 Then settlement rate = (5.00/5.00) * 1,000,000 = 1,000,000 b) Settlement Settlement of all Treasury bonds transactions shall be T+1 and be done on the basis of Delivery Versus Payment (DvP). Successful bidders’ current accounts at the Bank of Sierra Leone shall be debited with the aggregate settlement rate for all successful bids at the auction.

Successful bidders shall ensure that their current accounts are sufficiently funded to meet the settlement obligations arising for all successful bids. Settlement is done through RTGS and Temenous 24 (T-24).

The Auction Committee reserves the right to cancel Treasury Bonds that are not fully paid for by a successful bidder. Where a bidder fails to pay fully for Treasury Bonds on settlement day, the Bank may take punitive action against the bidder.
5. REVIEW AND AMENDMENT
At the discretion of the Central Bank these Guidelines may be reviewed and/or amended.
6. EFFECTIVE DATE
These Guidelines shall be effective from the date of its publication in the Gazette. Money Market Division Financial Markets Department Bank of Sierra Leone