NMB surpasses its initial retail bond target by 107%

POSTED ON Jun 22, 2016

NMB Bank issued its very first retail bond to the market on 10 May 2016. 

 NMB Bank is pleased to announce that the retail bond received an overwhelmingly positive response from investors and was oversubscribed by 107%.

The bank received 1,811 applications worth TZS 41.4 billion with applications surging in the last week of the offer. This demonstrates the trust people have in NMB Bank and the appetite for attractive investment opportunity in the local capital markets.

Upon seeking and receiving approval from the CMSA to further increase the ‘Green-shoe’ option, the bank will accept all received applications worth TZS 41,406,364,000, which is double the amount it had initially intended to raise. The bank had requested to raise an amount of TZS 20 billion through its first ever retail bond.

NMB Bank Chief Finance Officer, Mr. Waziri Barnabas said the success of the NMB Bank bond reflects the strong financial position NMB Bank holds in the market as the leading financial institution in the country. “We are pleased with the performance of the NMB Bank retail bond and most importantly pleased with the turnout of investors. This response validates that there is potential for sophisticated investment products in the local capital market.’’

Mr. Barnabas further added that the overwhelming response to the NMB Bank bond reinforces the need for banks to play a bigger role in developing the local capital markets as well as promoting financial inclusion. To encourage wide investor participation, the minimum investment amount for the NMB Bank retail bond was set at TZS 500,000.

The offer, which lasted from 10 May to 8 June 2016, was open to all investors in the country. The bond provided an avenue for savings mobilisation in the local market and support for the continued growth and development of the capital markets.

The issuance of the bond was part of NMB Bank’s strategy to diversify its funding sources. The proceeds of the bond issue will be used for on-lending to the bank’s customers who include individuals, micro, small and medium sized enterprises as well as large corporates and Government institutions.