NMB Bank 3-year retail bond is subscribed by 333 per cent

Dar es Salaam. A three-year retail bond, issued by NMB Bank Plc on June 10, 2019, was over -subscribed by 33 per cent, the bank announced yesterday.
The subscription signifies that investors, from different walks of life, have cash which they want to invest in profitable ventures.
Proceeds of the bond will be injected into financing the bank’s expansion endeavours, including issuance of affordable loans to small and medium-sized enterprises and retail investors.
The offer for the three-year bond – which offers an annual interest of 10 per cent to investors – was opened on June 10 and closed on July 8, 2019.
“NMB has successfully raised Sh83.349 billion, which is higher than the expected amount of Sh25 billion, representing a subscription level of 333 per cent. This is another significant milestone that signifies confidence that investors have in NMB Bank,” the bank’s acting managing director, Ruth Zaipuna, said in Dar es Salaam yesterday. The bond will be listed at the Dar es Salaam Stock Exchange (DSE) today (Friday, August 2, 2019).
“The three-year Tranche 3 Bond will be listed and commence trading on the DSE on 2nd August 2019 under the Code NMB-2019/22. T3 and will be paying coupon on 15th April, 15th July, 15th October and 15th January,” NMB said yesterday.
All individuals aged 18 and above were eligible to participate in the retail bond so long as they were able to invest a minimum of Sh500,000.
According to NMB Bank Plc Retail Banking chief Filbert Mponzi, clients from across all branches took part in the bond, including those from the remote areas.
“We received applications from our clients, some of who are based in areas where people know little about bonds and the stock market. This is an indication that people trust that their money will be safe when invested with us and that they will earn their interest on time,” he said.
In 2015, the Capital Markets and Securities Authority (CMSA) and the Bank of Tanzania (BoT) gave NMB Bank Plc a go ahead to issue bonds totalling Sh200 billion on Medium Term Note (MTN) basis. NMB has so far issued three tranches of bonds as Tranche 1 was issued in June 2016 to retailers (retail bond) during which period a total of Sh41.4 billion was raised.
That was a 107 per cent oversubscription from the Sh20 billion that was initially approved, complete with a green shoe option of Sh5 billion.
The bond was listed on the Dar es Salaam Stock Exchange (DSE) and later matured in June, 2019.
Tranche 2 – worth Sh23.3 billion - was issued in December, 2017 as private placement to institution. This bond matures in December, 2019 this year.
The CMSA has approved the bondholders’ register reflecting these results, ready for crediting the allotted bonds in the respective bondholders’ Central Securities Depository (CSD) accounts.
Stanbic Bank Tanzania limited was the Lead Arranger in the bond issuance exercise while Orbit Securities was the sponsoring broker.