5 November 2009
Kampala — THE PTA Bank has listed a 7-year corporate bond on the fixed income securities market segment of the bourse.
The bank in October offered the first tranche of a sh40b seven-year unsecured floating and fixed-rate note programme.
The bond has a 14% fixed rate and a floating interest rate valued at 1.25% above the 182-day government Treasury Bill rate.
The bank said it raised sh8.5b in the first tranche in an exercise that will span over 12 months.
Michael Gondwe, the PTA Bank president, said the bank would be returning to the market for the remaining tranches next year.
He said the amount raised would provide long-term finance for projects in agriculture, housing and the manufacturing sectors.
"We have projects in the pipeline worth $50m which will be closed in the near future. The funds will finance these projects with underlying local currency loans to avoid foreign exchange risks associated with international lending," Gondwe said during the listing.
The PTA bond comes on the heels of other capital- raising exercises that saw a sh30b Stanbic Bank bond, sh30b Housing Finance Bank bond and the $100m MTN syndicated loan.
Gondwe said the bank had financed projects worth $129m in the different sectors in the economy.
He said the bank's authorised capital stands at $2b, making it the most capitalised bank in the region.
Alex Gitari, director of finance at PTA Bank, said his institution would alleviate the shortage of long-term finance.
"While shortage of financing is an issue, from banking side, there is a shortage of critical ideas that can be financed. Some of our entrepreneurs have ideas that are vague, but don't develop them to a stage where funding can be attracted. We are looking for business ideas that can be funded," he said.
He was optimistic that PTA will raise the money over the stipulated 12-month period.
"Our note is structured by way of a programme and it will run for 12 months, so irrespective of what happens, we have a whole 12 months within which to realise our objectives. The timing is ideal and we are confident we will raise all the money."
The maiden bond PTA issued worth sh15b, debuted in 1999 and was redeemed in 2004.
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