Sunday, September 26, 2021

BHC’s two bonds listed on BSE

Botswana Housing Corporation (BHC) praised its median bond issuance saying the move gave it an assurance on its future capital requirement as it bends towards the development of the domestic capital markets.

The two bonds, BHC 017 due to mature in 2017, and the 10- year-note, dubbed BHC 020, which are part of the P 2 billion programme, were listed on the Botswana Stock Exchange (BSE) on Monday.

“There was a spread of 5 different investors ranging from life┬ácompanies, asset managers and banks. The note issuance┬áprogramme gives BHC a good┬ámix of fixed and floating rate funding for its funding requirement,” Reginald Motswaiso, BHC Chief Executive, said.

BHC was formed in 1971 and is a property management company that also deals in renting, selling and management of its property that is sprawled across the country.

Its mandate┬áas┬ádictated by the┬ásole ownerÔÇögovernment ÔÇô is to provide┬áhousing to Batswana.
The BHC 017 is a 91-days floating bond, which is priced at 170 basis points above the Bank of Botswana Certificates (Bobcs).

By far, it stands as the most rewarding investment vehicle in the country beating Bobcs and bank deposits by far.  Its face value is P 286 million and it was oversubscribed by 191 percent.
Meanwhile, BHC 020 bond with a face value P 103 million failed to attract the same amount of interest as it was only oversubscribed by 115 percent.

The long term bond is priced at 10.1 percent to maturity. The note pays dividend twice a year.
BHC, which is into property development, renting and selling, resorted to the idea of breathing life into the domestic capital markets after a grilling attack in the past when it resorted to borrowing money cheap from China.

The move offended market commentators because  it excluded  the local pension funds, insurance companies and other players that are awash with cash looking for investment homes.

Another controversy with the Chinese money was that it came┬áwith some strings attached; that meant that only Chinese companies could tender for BHC’s┬ámulti- million┬áconstruction projects.

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