The capital note, launched in 2023, is designed to provide Letshego with greater flexibility in managing its debt portfolio and funding ongoing growth opportunities across its pan-African footprint. By accessing capital markets through the issuance of debt securities, Letshego aims to diversify its funding sources beyond traditional bank loans and reduce its overall cost of capital. According to the company, the fixed-rate notes have staggered maturities, allowing it to better manage repayment schedules while offering investors a predictable return in a market environment characterised by fluctuating interest rates. A recent notice on the Botswana Stock Exchange (BSE) showed that the notes are classified as senior unsecured, meaning they hold priority over subordinated debt but are not backed by specific collateral. Whilst the company’s parent group, Letshego Africa Holdings, is a regular participant in the capital market, the issuance will be the first by Letshego Botswana, the group’s home base and one of its most profitable units. The interest rates between 16% and 18% reflect current market conditions and the risk profile associated with unsecured corporate debt in Botswana and the broader region. These yields are considered competitive given the country’s economic environment and prevailing inflation levels. Letshego’s move to tap into capital markets follows a growing appetite from institutional investors for fixed-income products in the local and regional capital markets. The company’s strategic issuance underscores its commitment to maintaining a strong balance sheet while positioning itself to seize expansion prospects in a dynamic financial services landscape.
This issuance is expected to fund both operational activities and strategic initiatives, including digital transformation efforts and market expansion plans.
