Barclays PLC has guaranteed the issue for both outstanding principle and interest.
The Bidco bond was listed on the Dar-es-Salaam Stock Exchange (“DSE”) on February 17, at a ceremony witnessed by the Tanzanian Minister for Industries, Dr. Juma Ngasongwa. The event was attended by government delegates, CMSA and DSE officials, as well as both issuer and investor representatives.
“Barclays is proud to be involved in this deal, which is a landmark transaction for Tanzania. It is also historic for us, in being the first major transaction of its kind solely arranged by Barclays in this country,” said Jonathan Berman, Director of Barclays Capital.
The bond was 40% over-subscribed for by Tanzanian institutional investors, and with its fixed coupon off10.45%, its pricing is one of the tightest spreads for a corporate issue in Africa (excluding South Africa)
The deal will have a significant impact in the region, as it is yet another step forward in the development of the financial markets. Barclays has recently focused on developing the domestic Debt Capital Markets regionally, and has already issued bonds in Zambia and Botswana, as well as having been involved in the two listed corporate issues in Kenya.
The issuer, Bidco, is a well known corporate regionally in the edible oils and soap manufacturing sector, having had a lonq history in Kenya and an expanding presence throughout East Africa. The funds raised through the issue will be applied in financing the company’s refinery project in Dar es Salaam.
“Projects such as these, which create employment for Tanzanians, are essential if we are to combat poverty,” advised Karl Stumke, incoming MD of Barclays Bank Tanzania. “This is an exciting period in Tanzania where we are seeing not only investment from Kenya coming into the country, but are also witnessing Tanzanian companies making acquisitions in the region. Barclays Tanzania is currently involved in a number of large transactions, which will generate substantial inward investment into the country”, added Stumke.
Barclays Africa, with its Head Office in Johannesburg, South Africa, is strategically positioned to provide African countries a full range of financial services into the future. Barclays already caters to a wide-reaching and growing market in Africa, and has the support and backing of the Barclays Group with over 300 years of retail and corporate banking experience.
“This transaction marks a significant development in the Tanzanian Capital
Markets and demonstrates Barclays leadership in the region,” said Berman.
