NBC’s Sh300billion goal in sight as bond oversubscribed by 30 percent

Dar es Salaam. The National Bank of Commerce (NBC) yesterday said its bond was oversubscription by 30 percent after the issuance was positively received in the market.

The bank is targeting to raise Sh300 billion in the next five years to boost its financing of businesses and other economic activities.

In the first tranche of the bond named Twiga Bond which was launched on November 7, 2022 and traded to December 7, 2022, the bank targeted to raise Sh30 billion.

However, the bond results released yesterday indicate that Sh38.91 billion was raised, representing a subscription of 130 percent, according to the bank’s director of business banking, Mr Elvis Ndunguru.

This is NBC bank’s first public issuance aimed at supporting lending to retail, small and medium-sized businesses, agricultural activities, businesses whose products and services directly impact women and youth, and local and multinational corporations.

Speaking during the announcement of the results, Mr Ndunguru said the bond sold for one month was officially closed on December 7 this year “with great success compared to the bank’s expectations.”

“As one of the largest lenders in Tanzania, we are thrilled to announce the success of the first tranche of Twiga bond issued early last month and oversubscribed by 30 percent,” he said.

He said investors in the NBC Twiga Bond will earn a whopping interest rate of 10 percent per annum, payable semi-annually throughout the five years until December 2027. The interest rate paid is free from withholding tax deduction, he added.

“This is the first time the bank has issued bonds for the public and it is a welcome call to the SMEs, farmers and small traders who form the majority of employments of the youth and women in Tanzania,’’ said Mr Ndunguru.

The ban acknowledged the guidance and support from the Bank of Tanzania (BoT), Capital Markets and Securities Authorities (CMSA), and Dar es Salaam Stock Exchange (DSE) and efforts made by all parties including transaction advisors to ensure that the first tranche of bond was successful.

Speaking at the event, the representative from the BoT, Mr Lameck Kakulu, said that the central bank is more interested in the objectives of the bond that aims to expand lending at affordable prices.

The representative from the Dar es Salaam Stock Exchange (DSE) Mr Emmanuel Nyalali mentioned the date of listing the bond on the stock market as December 20, this year the move that will provide an opportunity for various stakeholders to participate in the sale of the bond.