Asset manager puts $2mln bond on hold after RBZ query

Asset manager puts $2mln bond on hold after RBZ query

By Bernard Mpofu, HARARE, March 9 (The Source) – Alpha Asset Management firm has put on hold its $2 million asset-backed bond after the Reserve Bank of Zimbabwe raised concerns over details relating to the debt instrument, The Source has established.

Last October, the company announced plans to raise the funds through a special purpose vehicle called Dolinate Investments for on-lending to microfinance institutions at relatively low rates.

The offer was initially supposed to close on December 5 before the central bank wrote to the company asking how the bond would effectively stimulate growth in productive sectors given the high interest rates charged by MFIs.

“The bond had attracted a lot of interest in the market. It had been structured on the lines of a private placement and the Reserve Bank wanted more clarity on this. At the moment the asset management firm has engaged relevant authorities so that it can be given prescribed assets status,” a source familiar with the developments said.

Alpha managing director Isabel Zemura referred all questions to the company’s chairman after initially granting an interview to The Source. The firm’s chairman Doug Mamvura could not be reached for comment.

The asset manager said the proposed issue would have been the first tranche of a $10 million medium asset-backed bond programme. The stalled bond has a coupon (interest) rate of 15 percent per annum which would be paid annually.

It had a tenor of three years.