Exim Bank Tanzania on Monday issued to the public the first ever retail bond in a move designed to raise 15bn/- to boost its capital.“This is the first-of-its-kind bond that permits investors with as little as 1m/- to invest in bonds to be listed on the Dar es Salaam Stock Exchange (DSE),” said Mr Selemani Ponda, Exim Bank Chief Finance Officer.
The bonds will offer investors guaranteed annual tax free interest of of 14 per cent payable half yearly for a period of 6 years. Further, Investors may use their Bonds as collateral for any borrowings (including from the Issuer) in accordance with the Dar es Salaam Stock Exchange (DSE) rules.
He said the bond offers small and medium size investors who does not have investment opportunities similar to those available to large investors and corporates. He said the bond targets large and small savers, wholesale and retail investors.
“As with many of our pioneering initiatives, this public Issue of bond demonstrates Exim Bank’s innovation in developing Debt and Capital Market in Tanzania and work towards achieving financial inclusion in the country,” he said.
“We are delighted to be launching our first-ever retail bonds to investors in Tanzania.
“I am confident that this offer will appeal to retail investors, with attractive yield and ability to trade on DSE as well as using the instrument as security for obtaining credit facilities from various institutions whilst give valuable opportunity to participate in growth story of one of the top 5 local leading bank in Tanzania,” Said Mr Ponda, the CFO.
With a minimum face value of 1m/-, a tax free 14 per cent per annum interest is very competitive compared to current rates on small ticket fixed deposits which offers average interest rate of eight per annum.
The bonds will also be traded on the Dar es Salaam Stock Exchange (DSE), offering liquidity to investors. Bonds are securities issued by a borrower, in this case the Exim Bank Tanzania.
In turn, the bank undertakes to pay a set amount of interest after each six months for the lifetime of the bond. The money is returned to the investor on maturity. CORE Securities Managing Director, Mr George Fumbuka, whose company is the bond’s sale lead-manager said the Public Offer was open for subscription yesterday and close on 18th December, 2015.
“Applications for the Public Offer may be made via mobile phones by dialing *150*36#, pointing to the growing relevance of mobile money solutions in the evolving payments space and also various appointed placing agents as well as Exim Bank branches spread across the country.
The minimum investment amount under the Public Offer is one 1m/- or higher amounts in integral multiples of 1m/-,” he said. Mr Fumbuka said that core Securities Limited, as the market makers, are willing to buy or sell the bonds to subscribers at any given time.
Source: Daily News, reported from Dar es Salaam, Tanzania
With a minimum face value of 1m/-, a tax free 14 per cent per annum interest is very competitive compared to current rates on small ticket fixed deposits which offers average interest rate of eight per annum.
The bonds will also be traded on the Dar es Salaam Stock Exchange (DSE), offering liquidity to investors. Bonds are securities issued by a borrower, in this case the Exim Bank Tanzania.
In turn, the bank undertakes to pay a set amount of interest after each six months for the lifetime of the bond. The money is returned to the investor on maturity. CORE Securities Managing Director, Mr George Fumbuka, whose company is the bond’s sale lead-manager said the Public Offer was open for subscription yesterday and close on 18th December, 2015.
“Applications for the Public Offer may be made via mobile phones by dialing *150*36#, pointing to the growing relevance of mobile money solutions in the evolving payments space and also various appointed placing agents as well as Exim Bank branches spread across the country.
The minimum investment amount under the Public Offer is one 1m/- or higher amounts in integral multiples of 1m/-,” he said. Mr Fumbuka said that core Securities Limited, as the market makers, are willing to buy or sell the bonds to subscribers at any given time.
Source: Daily News, reported from Dar es Salaam, Tanzania
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