Senior Business Reporter
THE Infrastructure Development Bank of Zimbabwe (IDBZ) is seeking a listing on the Financial Securities Exchange of infrastructure development bonds worth $65 million that were issued in 2014 to fund energy projects.
According to IDBZ’s abridged pre-listing statement released on Monday, the institution is proposing the listing by way of introduction, its Series 1 2014B and Series 2 2014B infrastructure development bonds issued towards the end of 2014.
The Financial Exchange Securities (Finsec) is the second securities exchange in Zimbabwe and the first Alternative Trading Platform (ATP). The principal reason for the listing of the bonds is to broaden market participation in the trading of the bonds to stockbroking firms, custodians and qualifying individuals and institutional investors.
IDBZ, through the proposed listing, enhances liquidity of the bonds due to wider access that buyers and sellers would have to professional broking services on Finsec.
“Since the issuance of the bonds in November 2014, investors in the bonds have continued to hold the instrument 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 secondary market in a transparent manner has led to the IDBZ to seek admission of the bonds onto the Fixed Income Board of the Finsec ATP,” said the infrastructure development institution.
Through the infrastructure development bond Series 1 2014B, the banking institution raised $15 million to finance the completion of the Zimbabwe Electricity Transmission and Distribution Company’s prepaid metering project.
IDBZ further raised $50 million through a bond issue Series 2 2014B to finance the refurbishment of Kariba South Power Station and the repowering of the Harare Power Station by ZETDC.
Listing of the bonds would also allow the creation of a market-determined price discovery mechanism in the trading of the bonds.