Seven projects get prescribed asset status

HARARE - Treasury has granted prescribed asset (PA) status to seven major projects, including two that are United States dollar denominated.

This means institutions such as insurance companies and pension funds can choose to invest in one or more of these assets to meet their statutory obligations.

These entities are required by law to hold a portion of their investments in prescribed assets.

Extending prescribed asset status beyond bonds and other Government paper to “alternative projects” has been necessitated by calls from the industry for investment assets that can hedge against inflation and have greater socio-economic impact.

The list includes: First Mutual’s $200 million Micro Finance issue, whose purpose is working capital for on-lending to customers in the key sectors of the economy.

The issuance has tenor options of 6.12 or 24 months, and semi-variable interest rate fluctuating between 30 percent and 60 percent with a one percent for every 10 percent increase or decrease in the consumer price index (CPI).

Then there is the Silo Food Industry $350 million issuance targeted towards the manufacturing sector as working capital for processing of basic food commodities. The issue has a tenor of 180 days, and interest of 35 per annum.

Sahwira Agriculture is looking to raise US$20  million for capital expenditure and working capital financing for crop production. The issue has a 270-day tenor and is offering interest of eight percent per annum.

After getting full subscription to its initial $1 billion issue, Mangwana Opportunities Private Limited is looking to raise an additional $1.5 billion on prior amount to bring the total issue size to $2.5 billion through equity.