If you’ve seen a Bank of Uganda Treasury Bond auction announcement, some of the terminology can initially be difficult to understand.
What is a competitive bid?
What is a non-competitive bid?
What does cut-off yield mean?
What happens after your bid is accepted?
And what does it mean when the Bank of Uganda says a Treasury Bond is being reopened?
This guide explains the mechanics behind Bank of Uganda Treasury Bond auctions and some of the important terms investors encounter when participating in Uganda’s government securities market.
If you’re completely new to Treasury Bonds, start with our guide to Treasury Bonds in Uganda.
What Is a Bank of Uganda Treasury Bond Auction?
Treasury Bonds are government securities through which investors lend money to the Government of Uganda under defined terms.
The Bank of Uganda conducts government securities auctions through which Treasury Bonds can be issued or existing bonds reopened.
Before an auction, information is published identifying the securities being offered and the applicable auction dates.
Investors submit bids, the auction takes place and results are subsequently published.
Those results provide information such as the amounts tendered, amounts accepted and resulting yields.
New Treasury Bond vs Reopened Treasury Bond
Not every Treasury Bond auction introduces a completely new bond.
Sometimes the Bank of Uganda reopens an existing Treasury Bond.
New Bond
A new Treasury Bond introduces a new government security with characteristics including its own:
- ISIN
- Coupon rate
- Maturity date
- Payment schedule
Reopened Bond
A reopening makes an additional amount of an existing Treasury Bond available.
Because it is an existing security, characteristics such as its coupon rate and maturity date are already established.
However, the price and yield resulting from the new auction can reflect prevailing market conditions.
This explains why you may see a Treasury Bond with an existing coupon rate auctioned at a different yield.
How Does the Treasury Bond Auction Process Work?
The process can be understood in several stages.
1. Bank of Uganda Announces the Auction
Before the auction, information is released identifying the government securities being offered.
For Treasury Bonds, this can include:
Tenor
The broad term of the bond, such as 2-Year, 5-Year, 10-Year or 20-Year.
ISIN
The unique identification number assigned to the security.
Coupon Rate
For an existing or reopened bond, this is the rate used to determine scheduled coupon payments.
Maturity Date
The date on which the bond reaches the end of its term.
Auction Date
When the Treasury Bond auction takes place.
Settlement Date
When settlement following the auction is expected to occur.
For upcoming dates, see the Bank of Uganda Treasury Bond Auction Calendar 2026/27.
2. Investors Submit Bids
Investors participating in an auction submit bids for the Treasury Bonds being offered.
An important distinction is between competitive and non-competitive bids.
Competitive Bid
With a competitive bid, the bidder specifies the yield at which they are willing to participate.
This gives the investor more control over the yield requested, but the bid may not necessarily be accepted.
Non-Competitive Bid
A non-competitive bidder does not specify a yield.
Instead, the investor agrees to participate based on the auction outcome applicable to that bidding category.
For many individual investors, understanding this distinction is important when reading Bank of Uganda auction documents.
3. The Auction Takes Place
The bids received are evaluated through the auction process.
Demand can vary significantly between different Treasury Bond maturities.
This is why Bank of Uganda results normally provide information about both the amount offered and the amount investors attempted to invest.
4. Bank of Uganda Publishes the Results
Following the auction, investors can see what happened.
A results announcement can contain several figures that initially look complicated.
Here’s what the most important ones mean.
How to Read Treasury Bond Auction Results
Amount Offered
This is the amount intended to be raised through the particular security.
Amount Tendered
This represents the amount investors attempted to invest.
If the amount tendered substantially exceeds the amount available, it indicates strong demand during that auction.
Amount Accepted
Not every amount tendered necessarily has to be accepted.
The results therefore show how much was ultimately accepted.
Cut-Off Price
This is the price associated with the auction’s cut-off.
Treasury Bonds can trade above or below their face value, so price matters when evaluating the investment.
Yield at Cut-Off
The cut-off yield is one of the most closely watched figures in Treasury Bond auction results.
It provides information about the yield resulting from the auction process.
The yield should not be confused with the bond’s coupon rate.
Bid-to-Cover Ratio
The bid-to-cover ratio provides an indication of demand relative to the amount accepted.
A higher ratio indicates that bids exceeded the amount accepted by a greater margin.
Coupon Rate vs Cut-Off Yield
This is one of the most important concepts to understand when reading Bank of Uganda Treasury Bond results.
The coupon rate and yield are not the same thing.
The coupon determines scheduled interest payments based on the bond’s face value.
Yield takes into account factors including the price investors pay and the expected cash flows from the bond.
This becomes particularly visible when an existing Treasury Bond is reopened.
A bond may already have a coupon of, for example:
15.25%
while the auction produces a cut-off yield of:
11.70%
There is no contradiction.
The bond’s existing coupon hasn’t changed. The auction price and prevailing market conditions affect its yield.
For a fuller explanation, read Treasury Bond Rates in Uganda: Current Rates & Yields.
What Happens After a Successful Treasury Bond Bid?
After the auction comes settlement.
Settlement is when the transaction resulting from a successful bid is completed according to the auction terms.
This is why Treasury Bond announcements usually provide both:
Auction Date
and
Settlement Date
Investors participating in an auction need to ensure that the required funds are available according to the applicable settlement requirements.
Failure to complete settlement can have consequences under the applicable government securities rules.
How Are Treasury Bond Coupon Payments Made?
Once you hold a Treasury Bond, the bond pays coupons according to its payment schedule.
Uganda Treasury Bond coupons are generally paid every six months.
Suppose you hold UGX 10 million in face value of a bond carrying a 15% annual coupon.
The annual coupon would be:
UGX 1,500,000 before applicable taxes.
That would generally mean two payments of:
UGX 750,000 before applicable taxes
during the year.
The actual dates depend on the particular Treasury Bond.
Can Treasury Bonds Be Sold After the Auction?
Yes.
A Treasury Bond doesn’t disappear from the market after its auction.
Existing Treasury Bonds can be traded through the secondary market.
This means an investor may be able to sell a bond before maturity, while another investor may be able to buy it without participating in the original auction.
The market price and yield can change after issuance.
This is also why investors looking to buy Treasury Bonds don’t necessarily have to wait for the next Bank of Uganda auction.
Do You Need to Participate Directly in an Auction to Invest?
Not necessarily.
Treasury Bonds can also be accessed through the secondary market.
Level Africa provides investors with access to available Treasury Bond opportunities, allowing you to review relevant information such as:
- Yield
- Coupon
- Price
- Maturity
- Investment terms
before investing.
For the complete process, read How to Buy Treasury Bonds in Uganda.
Key Treasury Bond Auction Terms
| Term | What It Means |
|---|---|
| Treasury Bond | Longer-term government security |
| ISIN | Unique identifier for a particular security |
| Coupon Rate | Rate used to determine scheduled interest payments on face value |
| Yield | Measure of return considering factors including price and expected cash flows |
| Maturity Date | When the Treasury Bond reaches the end of its term |
| Competitive Bid | Bid in which the bidder specifies a yield |
| Non-Competitive Bid | Bid that does not specify a yield |
| Reopening | Additional issuance of an existing Treasury Bond |
| Settlement | Completion of the transaction after an accepted bid |
| Secondary Market | Market where existing Treasury Bonds can be bought and sold |
| Bid-to-Cover Ratio | Indicator comparing demand with the amount accepted |
Follow Bank of Uganda Treasury Bond Auctions
If you want to follow the market rather than understand the mechanics, use the appropriate Level Africa resource:
Upcoming auctions
See the Bank of Uganda Treasury Bond Auction Calendar 2026/27.
Current rates and yields
See Treasury Bond Rates in Uganda.
Current-year market activity
See Bank of Uganda Treasury Bonds 2026.
How to invest
See How to Buy Treasury Bonds in Uganda.
Understanding Treasury Bonds generally
See Treasury Bonds in Uganda.
Explore Available Treasury Bonds
You don’t have to understand every part of the auction process before reviewing Treasury Bond opportunities.
Compare available Treasury Bonds on Level Africa, including their yields, coupon rates, maturity dates and investment terms.
Frequently Asked Questions
What is a Bank of Uganda Treasury Bond auction?
What is a reopened Treasury Bond?
A reopened Treasury Bond is an existing government security for which an additional amount is being offered. Its existing characteristics, such as coupon and maturity date, remain associated with the security.
What is a competitive Treasury Bond bid?
A competitive bid allows the bidder to specify the yield at which they are willing to participate.
What is a non-competitive bid?
A non-competitive bidder does not specify a yield and instead participates according to the applicable auction outcome.
What is the Treasury Bond cut-off yield?
The cut-off yield is the yield associated with the auction cut-off and is an important figure published in Treasury Bond auction results.
Is the cut-off yield the same as the coupon rate?
No. The coupon determines scheduled interest payments based on face value, while yield reflects factors including the price paid and expected cash flows.
What does settlement mean?
Settlement is the completion of the transaction after a successful auction bid according to the applicable auction terms.
Can I buy a Treasury Bond without participating in an auction?
Yes. Existing Treasury Bonds can also be bought and sold through the secondary market.
Where can I find the next Treasury Bond auction?
See Level Africa’s Bank of Uganda Treasury Bond Auction Calendar 2026/27 for upcoming scheduled auction dates.
Where can I see the latest Treasury Bond yields?
See Treasury Bond Rates in Uganda for the latest available rate and yield information.