FBC, Agribank seek to raise $20m for agric
FBC Bank and Agribank have entered into a partnership to mobilise $20 million for 2016/17 agriculture season through the issuance of Agro Bills, an official said last week.
The two financial institutions will soon invite investors such as pension and provident funds, insurance companies, commercial banks, individuals in Zimbabwe and other stakeholders to subscribe for Agro-Bills, FBC spokesperson Ms Priscilla Sadomba said last week. The Bills have been approved by the Ministry of Finance.
They will have a tenure of between 270 days and 360 days while interest is negotiable on private placement basis, said Ms Sadomba. The Bills have the following features:
An undertaking by Agribank and FBC to settle the Bills on maturity, a sinking fund established and managed by the issuers where the two banks will make deposits from agricultural sales proceeds on a stop order basis, prescribed asset status, liquid asset status, Government guarantee and tax exemption.
The Bills will constitute direct obligations of Agribank and FBC and will rank pari-passu among themselves.
“Under this approved issue of Agro-Bills, the issuers, FBC and Agribank, guarantee investors that they will release funds to cover the maturity of the Agro-Bills on maturity dates. Agribank and FBC Bank Limited will keep an electronic register of investors with beneficial interest in the Bills.
“The register will list individual holders of the Agro-Bills,” she said.
Last year, FBC Bank Limited and Agribank floated $20 million and managed to raise the amount for last season. The Bills are set to mature between June 20 and December 5 this year.
Over the past few years, some financial institutions have raised Agro-Bills to finance agricultural activities. Last year ZB Bank issued $5 million Agro-Bills while CBZ Bank and the Agriculture Marketing Authority raised $50 million to pay for grain deliveries.