While swap bonds cost about 13%, the Treasury converted unpaid supplier invoices into three-year paper at a coupon 4.5 points lower, and a plan to retire bills as the main tool.
Mozambique’s Treasury placed MT5.238bn of OT-2026-S10 in August 2026 by direct subscription, converting supplier debt into a three-year bond that matures on 10 August 2029 and pays a fixed 8.5%, Correio da Manhã reported. The swap bonds issued earlier in the year pay about 13%, which puts the supplier bond roughly 4.5 points cheaper for the State.
It was the tenth bond emission of the year and lifted the January to August total to MT45.008bn. For a company that is owed money by a ministry, August explains how an invoice becomes an instrument, and what it is likely to be worth when sold.
How an unpaid invoice becomes a bond
The supplier receives a security in place of cash and must find its own buyer.
In a direct subscription of this kind there is no auction. The State hands a creditor a bond equal to the amount owed, and the creditor chooses between holding it to 2029, pledging it to a bank, or selling it. The 8.5% coupon is fixed for the life of the bond, so the instrument’s market value depends on what investors demand elsewhere.
August’s bill averages in the central bank’s monthly series were 12.22% at 91 days, 12.27% at 182 days and 12.22% at 364 days. A three-year bond paying 8.5% against a required return of 12.2% to 13% would trade, on our arithmetic with annual coupons, at about 89 to 91 per 100 of face value. A supplier that needs cash at once should expect to sell at that discount, which is a loss of 9 to 11% on the debt.
The 6 August swaps found few takers
Holders took 24.5% of one offer and 38.5% of the other.
On 6 August the Treasury ran two exchange auctions to move maturing 2026 bonds into longer paper. Club of Mozambique reported that OT-2026-S8 offered MT4.192bn and placed MT1.027bn, while OT-2026-S9, a bond maturing on 6 August 2031, offered MT2.126bn and placed MT818.6m. Together they placed MT1.845bn, at rates around 13%.
Diário Económico put the cumulative total of swaps in 2026 at MT39.77bn against a plan of MT45.7bn, so about 87% of the programme is done with four months to go. With the remaining MT5.9bn of the programme still to place, the later auctions will show whether holders warm to the offer or leave the Treasury to pay in cash.
A plan to retire the bill as the main instrument
Domestic borrowing is projected to fall 52%, and bills from 85% of new issuance to 10%.
The Medium-Term Fiscal Scenario for 2027 to 2029, approved by the Council of Ministers and reported by Club of Mozambique on 14 August, projects domestic borrowing of MT35.9bn in 2026, MT20.9bn in 2027, MT19.8bn in 2028 and MT17.2bn in 2029. It also states that the Government intends to reduce reliance on Treasury bills gradually, from about 85% of new issuance to about 10% by 2029.
Social, sustainability, carbon-credit and catastrophe bonds are listed as options. Public debt is estimated at 72.2% of GDP in 2025, with a target of 67.1% by 2029. These are plans, not decisions: nothing in the scenario yet says which instrument fills the gap that bills leave.
What a bank, a supplier and a treasurer do
Plan for fewer bills, longer bonds and invoices that arrive as securities.
A bank treasurer whose liquidity ladder rests on 91- and 364-day bills should start building a bond bucket. If bills fall as planned, the 364-day bill that averaged 12.22% in August will be replaced by paper that is harder to sell. A supplier to the State should ask, before the next contract, whether payment could come as an OT, and price the discount in from the start.
A corporate treasurer should keep a running tally of State receivables by ministry and age, because the S10 template, a three-year bond at 8.5%, is now an established route. The decisive question for August’s data is how many of your own invoices are in the queue, and whether a bank will lend against the bond when it arrives.
Sources
- Correio da Manhã. “Moçambique colocou mais de 615 ME em Obrigações do Tesouro desde janeiro”. 8 September 2026. https://www.correiodamanhacanada.com/mocambique-colocou-mais-de-615-me-em-obrigacoes-do-tesouro-desde-janeiro/
- Club of Mozambique. “Mozambique places another €25.2m through Treasury bond swaps”. 11 August 2026. https://clubofmozambique.com/news/mozambique-places-another-e25-2m-through-treasury-bond-swaps/
- Diário Económico. “BVM conclui duas trocas de Obrigações do Tesouro”. 10 August 2026. https://www.diarioeconomico.co.mz/2026/08/10/economia/bvm-conclui-duas-trocas-de-obrigacoes-do-tesouro/
- Club of Mozambique. “Mozambique aims to halve domestic borrowing in three years”. 14 August 2026. https://clubofmozambique.com/news/mozambique-aims-to-halve-domestic-borrowing-in-three-years/
- Banco de Moçambique. “Mercado Monetário – série de taxas de juro médias mensais do MMI”. https://bancomoc.mz/pt/areas-de-actuacao/mercados/mercado-monetario/
