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The African Development Bank (AfDB) has received approval from the Government of Uganda to issue bonds denominated in Uganda Shillings on the Ugandan capital market.
Pierre Van Peteghem, Treasurer of the African Development Bank Group, said that following the Government's authorization, the multilateral bank is currently processing all regulatory steps required for the launch of a Note Program.
"The Note Program will allow the Bank the flexibility to issue bonds on a routine basis, in various tranches, rather than as standalone transactions. Capital market regulators are considering our Note Program proposal, which would put the Bank in a position where we can swiftly meet our clients' local currency funding requirements as and when they arise and market conditions allow," Mr Van Peteghem said. He added that, "Subject to approval by regulators and market conditions allowing, the first tranche under the Uganda Shilling Note Program will be issued in the coming weeks."
According to Olivier Eweck, Manager, African Currencies Funding in the Treasury department, the bonds will be structured to suit the funding requirements and repayment profiles of underlying project loans. He also mentioned that African Alliance Uganda had been appointed Sponsoring Broker for the Note Program.
"We believe that bond issuances in local currency not only contribute to capital market development and domestic resource mobilization efforts but also enable borrowers to match debt repayment currency with the currency in which revenues are generated thereby minimizing foreign exchange risk," Mr Eweck said.
As part of its Local Currency Initiative, the AfDB has issued, since 2005, a series of bonds denominated in or linked to the Botswana Pula, Ghana Cedi, Kenya Shilling, Tanzania Shilling, Uganda Shilling, Zambian Kwacha and the Nigerian Naira.
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