Botswana Housing Corporation (BHC) on Monday issued two tranches of notes, BHC 017 and BHC 020, with an aggregate value of P389 million off their inaugural P2 billion note programme. The issue is structured into two notes, P286 million floating rate note which is due in December 2010 and P103 million 10 year fixed coupon note which is due in December 2020.
Statistics from the Botswana Stock Exchange (BSE) show that the listed bonds are the biggest listed aggregate amount issued by a state owned entity in the last two years. The Corporation further revealed that the floating rate of the bonds is currently the largest listed bond on the BSE.
The BSE said on Monday that the listing will expand the country’s bond market and boost economic activity through an improved capital flow. The busiest year on record for the domestic bond market before this year’s listing by BHC was 2008 with 13 new debt securities listing while 2006 and 2007 registered four and two respectively.
BHC Chief executive officer (CEO) Reginald Motswaiso revealed during the inaugural listing on Monday that, “BHC017 and BHC020 were oversubscribed by 191% and 115% respectively.
He stated that he was pleased with the outcome of the issue.
“There was a spread of five different investors ranging from life companies, asset managers to banks. The note issuance programme gives BHC a good mix of fixed and floating rate funding for its funding requirement,” Motswaiso said.
He further said that BHC will be floating the securities in the market on a yearly basis to allow them to raise money for the building of extra units of houses across the country.
The Corporation said the proceeds of the issue will be used to fund the National Development Plan (NDP 10) initiative that intends to build 29, 000 housing units in seven years.
Stanbic Bank has been appointed as the legal advisor in the bond listing. Mr. Tasha Ferreira, executive director of corporate and investment Banking at Stanbic Bank revealed during the launch that his Bank’s debt Capital Markets team has raised over P7.3 billion in Botswana since 2003.