02 January 2016, Dar es Salaam — Exim Bank Tanzania has announced the successful closure of its six-year retail bond which was oversubscribed by almost 100 per cent.
The initial public offering of the Tanzania’s first-ever retail bond was Sh10 billion with a greenshoe option to go up to Sh15 billion to beef up the bank’s operational capital but it received Sh19.97 billion from investors across the country.
The bank raised the funds as Tier II capital through the issuance of bonds to meet its growing pace and business requirements.
The funds raised will be used for long-term lending activity of the bank for better asset-liability matching, the bank said in the bond prospectus.
“We are delighted that this successful bond issue has provided so many Tanzanians with an opportunity to become part of growth story of Exim Bank (Tanzania) Limited.
The success of this pioneer retail bond clearly demonstrates the confidence investors have in the strengths of Exim Bank and also the attractiveness of the innovative long-term savings products in the country,” said Exim Bank Tanzania chief finance officer Selemani Ponda.
The bond IPO which opened on November 23, 2015 closed on December 18 and after approval from the Capital Markets and Securities Authority (CMSA) it is expected to be listed on the Dar es Salaam Stock Exchange (DSE) for trading on June 20, 2016, according to the prospectus. The exchange-traded bond offered investors with a minimum of Sh1 million a guaranteed 14 per cent interest for six years.
“Exim Bank is working out an allotment process to allot bonds to investors to be shared and approved by CMSA.
“Post CMSA approval, the bond will be listed on DSE,” said Mr Ponda as he extended thanks to CMSA, DSE , brokers, reporting accountant, Bank of Tanzania and “all the investors who reposed their faith into the bank and made this yet another innovative initiative a great success”.