🤵‍♂️Name Is Bond...Treasury Bond

Welcome to the 66th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🪀 T-bills: Ethiopia’s New Favorite Toy?

• 📝 First Year Report: No need for ወላጅ

• 🖼️ Big Picture

Thanks for reading!

Hello Capital Markets? About Those T-bills

Investing

What would you do if you were told you needed to raise ETB 117 Billion in three months? 

📞 Call your rich uncle?… Offer a seat at the Palace dinner table for 1B Birr each?

📃 Or, issue Treasury Bills?

Hint: we’re a finance newsletter, of course it’s treasury bills.

News broke that the Ethiopian government has set a target to sell T-bills and raise 117B by September. 

Here’s a quick breakdown 🔽

🧐 Demystifying T-bills

T-bills (bills can be interchanged for bonds here) are certificates issued by the government in exchange for a cash advance. That cash advance is returned to the buyer of the T-bill with an interest.

Technically, the issuer sells them at a ‘discounted’ price and then buys them back at face value, meaning you’re still getting a return.

It’s like buying mangoes for 50 Birr per kilo when the market price is 65 and then you sell them back with a 15 Birr profit. You might say, that sounds silly because where is the incentive for the issuer?

The government is not looking for profit here rather a short term cash injection. And by short term we mean 28 days up to 52 weeks. T-bills mature in a predictable timeline - you get your initial investment back plus interest in a short period, essentially with a 28 day bills, the pay-off will be at the end of that period.

👣 Where Was This Move Before?

Most of you might remember the rally of bond sales from when the government asked the whole nation for cash that was going to the construction of the Grand Ethiopian ህዳሴ Dam. The push to fund such a gargantuan project had us unite in ways never seen before.

So treasury bills have always been around. 

The Ministry of Finance is shifting away from direct financing from the National Bank to bridge the budget deficit. Its move also coincides with the inclusion of T-bills as tradable assets on the stock exchange.

🪬 Which Bill Brackets Are Showing Interest?

Based on the last auction on July 23, 2025, these are the numbers: