HARARE,– Deposit taking microﬁnance institution GetBucks’s $15 million bond, which was placed privately by way of a ‘tap issue,’ has had no takers so far due to low investor appetite for monetary assets, officials familiar with the matter said on Tuesday.
In August last year, the company announced that it was going to privately place the $15 million Medium Term Note by way of a ‘tap issue’, a procedure that allows borrowers to sell bonds or other short-term debt securities from past issues at the current market price after the initial offer also had no takers.
A tape issue presents several advantages which include rapid execution, since no new prospectus is needed, lower arrangement and legal costs.
An official familiar with the issue told The Source that investors are preferring fixed assets and equities to monetary assets as a way of hedging their investments owing to the monetary developments, especially with view to inflation.
“So far we haven’t raised capital through the tap issue. l think the market is still looking at different types of instruments, but monetary assets have not been favourable in our environment. We see that investors have been leaning more and more towards fixed assets and equities,” said an official who declined identification as they are not authorised to speak about the issue.
The note was the second under a $30 million capital raise initiative. In April last year, Getbucks managed to issue a $5,4 million debt security which was fully subscribed and subsequently listed on the Zimbabwe Stock Exchange (ZSE).
However, an official said holders of the bond are “happily holding to their instruments, which explains why the bond is not actively trading on the local bourse.”
“The holders of that asset, in my view, are happy because they are holding to that asset. We are likely to see the market shifting towards debt securities as you can see with the Infrastructure Development Bank of Zimbabwe (IDBZ) and Untu Capital recently issuing bonds in the market,” said the official.
The official said Getbucks was optimistic that the $15 million Medium Term Note will eventually be taken with more clarity on the country’s economic direction.
“Its just a matter of time — people are assessing the environment.”
GetBucks was licensed by the Reserve Bank of Zimbabwe to operate as a deposit taking microfinance institution in 2015, and listed on the Zimbabwe Stock Exchange in January 2016. – Source