The Herald (Harare)

Zimbabwe: IDBZ Raises U.S.$17,8 Million From Bonds

The Infrastructural Development Bank of Zimbabwe has raised US$17,8 million from the maiden issue of its three-year Infrastructure development bonds that was concluded on November 30. The total subscription performance rate was 59,41 percent of the bonds issued.

Of the US$30 million bonds that were issued, the bank said it received 53 applications valued at US$17,8 million, which have already been allotted.

Bonds valued at US$12,176 million were not allotted. The IDBZ issued the bonds on October 29 to raise US$30 million to fund the retrofitting of prepaid meters in homes and small institutions countrywide that are being installed by the Zimbabwe Electricity Transmission and Distribution Company.

The bonds were earning a net coupon rate of 10 percent per annum and carried Prescribed Asset Status.The proceeds were supposed to assist pension funds and insurance companies to comply with statutory portfolio composition guidelines and also help in redirecting domestic capital towards infrastructure.

In terms of repayment, IDBZ had said the principal source of repayment for the bonds would be the operating cash flows from ZEDTC.The bank had also said it would create a sinking fund into which monthly deposits would be made to facilitate orderly repayment of the bonds.

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