EXIM BANK LAUNCHES THE FIRST EVER RETAIL BOND IN TANZANIA

Exim Bank Tanzania Chief Finance Officer, Selemani Ponda addresses a press conference to announce the Public Issue of the first-ever Retail bond in Tanzania to raise up to TZS 15 billion. This is a first-of-its-kind bond offering in Tanzania that permits investors with as little as one million shillings to invest in bonds to be listed on Dar Es Salaam Stock Exchange (DSE). He is flanked by CORE Securities Managing Director Mr. George Fumbuka (left) whose company is the bond’s Sale Lead-Manager and Dar es Salaam Stock Exchange Projects and Business Development Manager, Patrick Mususa.

CORE Securities Managing Director Mr. George Fumbuka (center) addresses a press conference to announce the Public Issue of Exim Bank's first-ever Retail bond in Tanzania to raise up to TZS 15 billion. This is a first-of-its-kind bond offering in Tanzania that permits investors with as little as one million shillings to invest in bonds to be listed in Dar Es Salaam Stock Exchange (DSE). He is flanked by Exim Bank Tanzania Chief Finance Officer, Selemani Ponda (right) and the bank’s Cluster Head, Agnes Kaganda.

Exim Bank Tanzania announced the Public Issue of the first-ever Retail bond in Tanzania to raise upto TZS 15 Bn. This is a first-of-its-kind bond offering in Tanzania that permits investors with as little as one million shillings to invest in bonds to be listed in Dar Es Salaam Stock Exchange (DSE).

The Bonds will offer investors a guaranteed Tax Free Interest of 14% p.a, 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.

“Exim Retail Bond offer small & medium size investors who does not have investment opportunities similar to that available to large investors and corporates an attractive opportunity to earn tax free guaranteed returns of 14% p.a for a period of 6 years”, Said Mr. Selemani Ponda, Chief Finance Officer (CFO). The bond will target both, 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 & Capital Market in Tanzania and work towards achieving financial inclusion in the country.’’ Explained Mr. Selemani Ponda, the Bank’s CFO during the launch ceremony held at the bank’s head office in Dar es Salaam recently.

“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 at 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 TZS 1 Million shillings, a tax free 14% per annum interest is very competitive compared to current rates on small ticket fixed deposits which offers average interest rate of 8% 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 i.e 6 years. The money is returned to the investor on maturity.

Speaking during the occasion, CORE Securities Managing Director Mr. George Fumbuka whose company is the bond’s sale lead-manager said the Public Offer will open for subscription on 23rd November, 2015 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 million shilling, or higher amounts in integral multiples of one million shillings.’’ he said.

Investors who are interested in subscribing for the retail bonds can obtain the Application Forms and investment information from the Exim Bank branches and offices of appointed placing agents.

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.

Mr. Selemani Ponda, Chief Finance Officer (CFO) of the Exim Bank, said, “EXIM Retail Bond is a pioneering step in right direction to develop capital market product in Tanzania. Further, it gives retail investor opportunity to earn attractive returns in par with that available to large corporate. By not setting a cap on the individual application amount and the size of the issue, Exim Bank will have greater flexibility in accommodating investor demand. ”