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IDBZ to list bonds on FINSEC

The Infrastructure Development Bank of Zimbabwe (IDBZ) will list two bonds on the fixed income board of the Financial Securities Exchange (FINSEC) tomorrow as it moves to broaden market participation in the trading of the debt security. BY BUSINESS REPORTER Those that will be able to participate include stock broking firms, custodians and qualifying individuals and institutional investors, IDBZ said in a pre-listing statement released yesterday. IDBZ two bonds to be issued — IDB Series 1 2014B Infrastructure bonds with a nominal value of $15 million and IDB Series 1 2014B with a nominal value of $50 million will be listed on the fixed income bond of FINSEC by way of introduction. “The trading of the bonds shall be conducted on the Alternative Trading Platform of Finsec,” the bank said. IDBZ raised $15 million to finance the completion of the Zimbabwe Electricity Transmission and Distribution Company prepaid meter project. It also raised $50 million to finance the refurbishment of the Kariba South Power Station and the repowering of the Harare Power Station by the Zimbabwe Power Company. The two bonds were issued in 2014 and have a tenor of 5 years and are guaranteed by the Government of Zimbabwe. The $15 million has a coupon rate of 8% per annum whereas the $50 million bond has a coupon rate of 9% per annum. The principal repayment will be a tenth of the face value after every six months until final redemption. IDBZ said since the issuance of the bonds in 2014, investors have continued to hold the instruments with no opportunity to trade them on the secondary market prior to maturity. “The very limited secondary market trading in the bonds has been based on private arrangements between investors but with no opportunity for price discovery. The need to facilitate efficient trading of the bonds on the market in a transparent manner has led the IDBZ to seek admission of the bonds onto the fixed income board of the FINSEC ATP (Alternative Trading Platform),” IDBZ said. The bank said the listing of the bonds would enhance the liquidity of the bonds due to “wider access that buyers and sellers will have to professional broking services of FINSEC” and allowing for a market-determined price discovery mechanism in the trading of the bonds. It said the listing would unlock bondholder value through access to a bigger trading platform with a variety of market participation. Source:

  Tue Nov 2017