TR lauds NMB for floating first sustainability bond in EAC

TANZANIA : TREASURY Registrar, Nehemiah Mchechu has implored Tanzanians to invest in the NMB Bank’s Jamii Bond as a secure and reliable source of income.

The NMB Jamii Bond is a 10-year multi-currency medium term bond launched on Monday under a Jamii Bonds initiative. It is the maiden sustainability security in East Africa.

Mr Mchechu made the remarks after gracing the event to launch the NMB Jamii Bond which seeks to raise 75bn/- in three years for financing a mixture of environmental and social impact projects in the country.

“I call upon Tanzanians to invest in this NMB Jamii Bond, which is not only secure but also a reliable source of income for those looking for a safe haven for their money,” Mr Mchechu noted.

Mr Mchechu said the security is not only multi-currency but also multi-purpose due to several factors, including helping to stimulate the development of local capital markets and focusing on both eco-friendly issues and social matter.

He said the new development in the local fixed income market reinforces aspirations of the government to diversify investment opportunities in the economy and offer both public and private sector entities a reliable source of capital.

The NMB Jamii Bond is the first tranche of their 10-year Multicurrency Medium Term Note (MTN) Programme worth 1tri/-.

Speaking on Monday in Dar es Salaam at the debut of the offer, bank’s Chief Executive Officer Ruth Zaipuna said the bond is for promoting development of environmentally friendly and inclusive growth offers investors an annual coupon rate of 9.5 per cent and has room for raising an additional 25bn/-.

“The Capital Markets and Securities Authority (CMSA) has also allowed us to raise 10 million US dollars (about 25bn/-) under this placement, which has a green shoe option of 5.0 million US dollars (about 12.5bn/-),” the seasoned banker noted, adding that the minimum investment in this newest NMB debt-financing instrument starts at 500,000/-.

The offer is a one-month investment opportunity open to both individual and institutional investors who are NMB customers and non-customers, who CEO Zaipuna said their interest earnings will be payable on quarterly basis.

According to her, the withholding tax exempted fixed-income security can be bought from any of the 230 NMB branches or stockbrokers licensed by CMSA up to 27th October this year.

Thereafter, NMB Jamii Bond will be listed at the Dar es Salaam Stock Exchange for trading until its maturity in November 2026.

Ms Zaipuna said the listing will enable other investors to invest it and accord its holders the opportunity to sell it whenever they wish.

The money that bondholders will lend the bank will be used to support national and global efforts to build resilience against the negative impacts of climate change, achieve sustainable infrastructure as well as advancing efficient and sustainable use of natural resources.

“Targeted sectors and projects to be financed include renewable energy, pollution prevention and control, water and waste water management, green buildings, clean transportation, climate change adaptation, women empowerment and gender equality, affordable housing, food security, essential services such as health and education, and the youth,” she noted.

The security offer event was also used by CMSA to officially hand over the new MTN approval to NMB Bank, which the regulator approved late last month. Its CEO Nicodemus Mkama said the 1tri/- mark of the note is not only historic locally but also and among the biggest in sub-Saharan Africa.

NMB Bank pioneered special-purpose securities in the country with the 197 per cent over-subscribed Jasiri Bond in 2022, which was the first-ever gender sensitive bond to be issued by a financier in sub-Saharan Africa to promote women finance.

The bond was the fourth tranche of the bank’s first MTN, which NMB Treasurer Aziz Chacha said was a 200bn/-programme approved by CMSA in 2016 that registered good results by yielding 220bn/-.

The first bond to be issued under the arrangement was subscribed by 207 per cent to generate 41.4bn/- from 1,739 investors, Mr Chacha noted, adding that the second issued in 2017 surpassed the target by 17 per cent with 23.4bn/-.

“The third bond was issued in 2019 and generated 83.35bn/-from 2,303 investors after being oversubscribed by 333 per cent whereas proceeds from NMB Jasiri Bond amounted to 74.3bn/-,” the NMB treasury guru said.

NMB Jamii Bond, which board chair Edwin Mhede said was another mark of the bank’s innovation prowess, has already raised interest in external capital markets with the International Finance Corporation (IFC) and British International Investment Plc deciding to co-anchor it.