Embolden by the credit appetite National Development Bank (NDB) is to float P 65 million priced at a coupon rate of 11.25 percent.
“NDB came to the market to tap on their existing bond NDB001 on December 2008 with a further issuance of P 65 million. The P 65 million further issuance has the same terms and conditions of NDB 001 and pay a fixed semi-annual coupon of 11. 25 percent on February 1 and August 1. The proceeds for the loan will be used for the growth of NDB’s loan book,” the bank said in a statement.
NDB’s P 1 00 million ten-year median bond maturing on August 29, 2017, came into the market in August last year and is in line with government’s plan to develop the capital market through listing on the Botswana Stock Exchange with the view of establishing a yield curve. In 2002, the government took a bold move by selling its Public Service Debt Fund (PDSF) by listing it on the stock exchange.
And, at the same time, it encouraged parastatals to do the same in a bid to raise cash as it warned that it was embarking on cost cutting measures. The intention is two pronged: to improve productivity, and at the same time, develop capital markets.
The P 100 million bond won acclamations from the leading international Business publishing houses, such as The London Banker Magazine, and the Financial Times, which said the issuance took the interests of all who were involved in the transaction. The Corporate Advisors for that transaction were Stanbic Debt Capital Market Africa, which trades as Standard Bank outside the southern African countries where Standard Chartered Bank is operating from.
Speaking about the current issuance, NDB’s chief executive offer, Oaitsi Ramasedi, said that “the issue closed a stop out yield of 11.20 percent, and there was a spread among 15 investors, while only 14 were awarded.”
He said the move gives his bank the necessary fire-power that will enable it to meet its funding covenants.
At the same time, the development was cheered by Leina Gabaraane, the incoming managing director of Stanbic, as one of the milestones achieved by the bank across the African continent.