IFC plans P270m bond float by year-end
Mbongeni Mguni | Friday October 14, 2016 17:53
The IFC, a member of the World Bank group, provides loans, equity and advisory services to the private sector in developing countries.
The float will be the IFC’s third in Africa under its Pan-African Domestic Medium Term Note Programme, which kicked off in Zambia in September 2013 with a $28 million note.
IFC Sub Sahara principal investment officer, Ndaba Mpofu told BusinessWeek that the forthcoming float would be the second largest under the Medium Term Note Programme, coming after the Zambia float.
He said the bond would be a seven-year note with a AAA-rating, which carries the advantage of attracting international investors. Mpofu however declined to provide further details on the investment the IFC was targeting with the bond nor the sector saying the transaction was sensitive to regulatory approvals.
“We are expecting the float within the next three months, but I cannot be specific about the client or the sector as the transaction is still with the regulators,” he said.
“This will be the first AAA rated bond and the advantage is that it will attract international investors who are only comfortable taking on risk in AAAs.”
Botswana is one of eight countries the IFC’s medium term note programme initially targeted for floats, meeting the criteria of stable macro-economic environment, sound regulatory frameworks and positive prospects for success.
Thus far, bond floats in Zambia, Rwanda and Namibia have been heavily oversubscribed, and with the local pension funds desperate for Pula denominated blue-chip investment opportunities, the upcoming float is expected to be well received.
“I’m looking forward to the Botswana issuance,” Mpofu said.
“We are working with the Bank of Botswana, the Botswana Stock Exchange and the Finance Ministry.”
He said the IFC would soon extend its note issuance beyond the initial eight countries initially identified.