PTA Bank, a regional development bank, will float a five-year bond to raise 32.6bn/- in the local market starting mid this week and later list the note on stock exchange.
The bond, according to the bank’s prospectus, is the first installment -- trenches, where interest will be paid in floating rate basis using six month Treasury bill and a set margin of 2 per cent.
‘Daily News’ understands that the bond initial primary market opens on Wednesday this week and closes April 29. It is anticipating to be listed on DSE on June 4.
“Minimum amount to be raised in order for the issue to be considered successful is 16bn/-,” the document for indicative price shows.
The bond full maturity is expected due in April 2020. The bond like many others rose in other countries and Tanzania expects to provide project and infrastructure finance and trade finance.
The proceeds of the bond, hence otherwise announced, are expected to be invested in the respective countries of issuance. These facilities are available to businesses and enterprises incorporated and doing business in the member states.
“The bank has also successfully issued local currency bonds in Tanzania, Kenya and Uganda, with the proceeds of the bonds being invested in the respective countries of issuance,” the prospectus shows.
PTA Bank’s primary source of funding is its share capital. Its subscribed capital as at end June 2014 stands at 1.43 billion US dollars of which 1.14 billion US dollars is callable.
A callable security is an embedded call provision that allows the issuer to repurchase or redeem the security by a specified date.
The Bank is a large financial institution with an asset base in excess of 2.85 billion US dollars as at June 2014. The bank has 23 shareholders with shareholders’ funds to the tune of 522 million US dollars. EAC member states are among the bank’s shareholders.
PTA bank credit rating by Moody’s in 2013 was Ba1 indicating intrinsic financial strength and strong shareholder support and strong liquidity position, which is an important rating factor for multinational development Banks.
Recently, Fitch upgrade the bank from BB- to BB supported their rating to strong liquidity due to the use of some bond proceeds to strengthen liquidity and improved credit quality due to reduction in non-performing loans.
While Global Credit Rating Company gave the bank BB+ based on its capital base and a capital/assets ratio of 18 per cent. Each agency applies its own methodology in measuring creditworthiness and uses a specific rating scale to publish its ratings opinions.
However, typically, ratings are expressed as letter grades that range, for example, from ‘AAA’ to ‘D’ to communicate the agency’s opinion of relative level of credit risk -- A’s being the best score.
The Bank is an African development financial institution and is the financial arm of COMESA. Although the Bank is a COMESA institution, its membership is open to non- COMESA States, non-regional countries as well as institutional shareholders.
The bond, according to the bank’s prospectus, is the first installment -- trenches, where interest will be paid in floating rate basis using six month Treasury bill and a set margin of 2 per cent.
‘Daily News’ understands that the bond initial primary market opens on Wednesday this week and closes April 29. It is anticipating to be listed on DSE on June 4.
“Minimum amount to be raised in order for the issue to be considered successful is 16bn/-,” the document for indicative price shows.
The bond full maturity is expected due in April 2020. The bond like many others rose in other countries and Tanzania expects to provide project and infrastructure finance and trade finance.
The proceeds of the bond, hence otherwise announced, are expected to be invested in the respective countries of issuance. These facilities are available to businesses and enterprises incorporated and doing business in the member states.
“The bank has also successfully issued local currency bonds in Tanzania, Kenya and Uganda, with the proceeds of the bonds being invested in the respective countries of issuance,” the prospectus shows.
PTA Bank’s primary source of funding is its share capital. Its subscribed capital as at end June 2014 stands at 1.43 billion US dollars of which 1.14 billion US dollars is callable.
A callable security is an embedded call provision that allows the issuer to repurchase or redeem the security by a specified date.
The Bank is a large financial institution with an asset base in excess of 2.85 billion US dollars as at June 2014. The bank has 23 shareholders with shareholders’ funds to the tune of 522 million US dollars. EAC member states are among the bank’s shareholders.
PTA bank credit rating by Moody’s in 2013 was Ba1 indicating intrinsic financial strength and strong shareholder support and strong liquidity position, which is an important rating factor for multinational development Banks.
Recently, Fitch upgrade the bank from BB- to BB supported their rating to strong liquidity due to the use of some bond proceeds to strengthen liquidity and improved credit quality due to reduction in non-performing loans.
While Global Credit Rating Company gave the bank BB+ based on its capital base and a capital/assets ratio of 18 per cent. Each agency applies its own methodology in measuring creditworthiness and uses a specific rating scale to publish its ratings opinions.
However, typically, ratings are expressed as letter grades that range, for example, from ‘AAA’ to ‘D’ to communicate the agency’s opinion of relative level of credit risk -- A’s being the best score.
The Bank is an African development financial institution and is the financial arm of COMESA. Although the Bank is a COMESA institution, its membership is open to non- COMESA States, non-regional countries as well as institutional shareholders.
Source: Daily News, reported from Dar es Salaam, Tanzania
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