STOCKBROKERS have projected the oversubscription of five years 12bn/- Tanzania Mortgage Refinance Company bond, which its initial sales close today.
The brokers have said that they have received a number of applications and most investors were waiting to settle payment after seeing the outcome of five-year Treasury bond interest in the auction held on Wednesday.
The five-year T-bond results showed that the bond yield rate went up slightly to 11.29 per cent from 11.05 per cent of last auction in March.
TMRC bond yield was set at plus 0.5 per cent in top of the Treasury bond.
Zan Securities Chief Executive Officer Raphael Masumbuko said they received enough orders to cover almost entire bond amount, but investors await T-bond results.
“Should the T-bond stick to around the last auction then we have a better deal. “Apart from the interest rate, the market is yawning for new items, especially corporate bonds. This pushes demand up,” Mr Masumbuko said.
The TRMC bond went for sale some ten days ago and close the primary sale of 12bn/- bond today. The TMRC said the bon proceeds will be loaned to commercial banks to enable them lend their home building customers.
Orbit Securities General Manager, Juventus Simon, said the TMRC bond oversubscribing was imminent, given the size offered to the market being small.
“The bond size is too small for this market. It can be subscribed a single institution,” Mr Simon said. The bond will later list on Dar es Salaam Stock Market for secondary trading.
The TMRC said in the future will issue the remaining amount in tranche but increase the year from five to seven or ten or 15 years, depending on the market situation.
TMRC was envisioned from its inception that TMRC will source funds from the capital markets through bond issuance among other sources.
TMRC is a specialised private sector financial institution that provides longterm funding to financial sector for the purposes of mortgage lending.
The company objective is to support financial institutions to do mortgage lending by refinancing Primary Mortgage Lenders (PMLs) mortgage portfolios.