DBN plans N$300m debut bond in July
Featured

26 May 2017
Author   Eric Nyasha Mhunduru
The Development Bank of Namibia (DBN) plans to issue a N$300 million debut bond on the Namibia Stock Exchange (NSX) between July and August, Chief Executive Officer Martin Inkumbi has said.
Proceeds from the issue, which has already received board and shareholder (Government) approval, will be used mainly to shore up the bank’s liquidity.
In a recent interview, Inkumbi told the Windhoek Observer that the bond issue forms part of a capital-raising strategy that saw the development bank receive a 12-year N$4,5 billion loan facility last year from the regional multilateral development bank, African Development Bank (AfDB).
“One of the things that we would like to do under that plan (capital raising) is to create a DBN bond that we can list on the NSX and that we can issue from time to time in the market whenever we need capital to finance projects and also manage the liquidity of the bank.
“So that activity is ongoing and we hope to be entering the market by July or August for the first time. At the moment, we have not finalised how much we want to raise with the initial issue, but we could be looking at raising around N$300 million for a start,” Inkumbi said.
The proposed bond is expected to mature in two or three years, but according to Inkumbi, the market appetite will dictate the final position.
Some of the business activities that will likely benefit from the proposed bond issue include those in the manufacturing sector, value adding enterprises as well as transport and logistics enterprises.
“Tourism is also very important for us so we will be financing hotel establishments and other service providers within the tourism sector,” Inkumbi said, adding that DBN stands ready to finance public private partnership activities to carry out specific projects relating to infrastructure development.
The DBN executive expressed his satisfaction with the quality of the bank’s loan book, which he said was within the guidelines of the Association of African Development Finance Institutions in the region.
DBN’s loan book now stands at N$8 billion, with non-performing loan loans at 9 percent, while the bank’s impairment level stands at four percent.
“Enterprises are repaying consistently to the DBN and we believe the quality of our loan book is still very good in comparison to other development financing institutions in the region.
“I also think the quality of our loan book is still stable since we have also been able to raise funds from other funders such as the AfDB who came and did their due diligence on the bank,” Inkumbi said.
 
 
 

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