Bank M Tanzania First Local Bank to Issue Corporate Bonds

Earlier this month, Bank M Tanzania Limited not only became the first local bank to issue corporate bonds in the Tanzania market, but was also the first corporate bond to be listed this year at the Dar es Salaam Stock Exchange.

According to Nimrod Mkono, the chairman of the board for Bank M, following the previous sale for the bank’s smaller bonds, which set a record when they were oversubscribed by 214 percent, the current listing of the TZS 3 billion bond represents the second opportunity for investors to acquire these bonds.

“Those who missed the opportunity because of oversubscription have the chance to buy now, after the listing on DSE,” said Mr. Mkono.

The bonds not only offer a tenor of five years, but also provide an opportunity for medium term investment, adequate liquidity with the listing on DSE, attractive coupon and a safety assurance that is supported by the strength of the bank.

Mr. Mkono went on to suggest that the demand for the bonds at the secondary market would likely be high based on its attractive offer of a 15% fixed interest rate due after five years.

In addition, the board chairman Mkono explained that the bank had decided to collect the subscription in order to prevent the public from unnecessarily blocking their funds and anticipating a refund of their excess subscription.

Dr. Fratern M. Mboya, the CEO of the Tanzania Capital Markets and Securities Authority, spoke briefly at the listing event at the Dar es Salaam bourse saying, “The listing of Bank M subordinated bonds at the DSE is not only going to increase the total number of listed securities, but also going to increase the number of listed securities under financial sector, being the first local bank to issue corporate bonds at the DSE.”

According to a recent report by the Guardian Tanzania, the managing director of the Dar es Salaam stock exchange, Gabriel Kitua, has said that the listing of such a young bank is encouraging because, in spite of its age, it has been able to meet all of the requirements for listing at the bourse, which indicates its strength.

In conclusion, Mr. Mkono explained in a recently published article that Bank M has been working closely with very highly reputable advisors in order to guarantee that the entire process is carried out in a way that will meet the specified regulatory and international standards.

“We are delighted to work with highly reputable advisors in this project and together we have managed to get this process done in a highly professional manner while adhering to all the regulatory and globally accepted standards,” said Mr. Mkono.