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┬ádomestic┬ácapital markets.
The two bonds,┬áBHC 017┬ádue to mature in 2017, and┬áthe 10- year-note,┬ádubbed┬áBHC 020, which are part of the P 2 billion programme,┬áwere 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┬áwas formed in 1971 and┬áis┬áa property management company that┬áalso┬ádeals in renting, selling┬áand management of its┬áproperty 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┬áa┬á91-days floating┬ábond, which is priced┬áat 170 basis points┬áabove the┬áBank of Botswana Certificates (Bobcs).
By far, it stands as the most rewarding investment vehicle in the country beating Bobcs and bank deposits by far.┬á Its face value is P 286 million and it was oversubscribed by┬á191 percent.
Meanwhile, BHC 020 bond┬áwith a face value┬áP 103 million┬áfailed to attract the same amount of interest┬áas it was only┬áoversubscribed by 115 percent.
The┬álong term bond┬áis priced at 10.1 percent to maturity. The┬ánote pays dividend┬átwice a year.
BHC, which is into property development, renting and selling, resorted to the idea of breathing life into the┬ádomestic capital markets after a grilling┬áattack┬áin the past┬áwhen it resorted to borrowing money cheap┬áfrom China.
The move offended market commentators because┬á it excluded┬á the local┬ápension funds, insurance companies and other players that┬áare 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.