Zimbabwe plans $100mln bond sale on dollar exchange

The VFX is a U.S. dollar-denominated exchange that started trading last October


HARARE- Zimbabwe plans to sell its first U.S. dollar-denominated bond on the recently launched Victoria Falls Stock Exchange (VFX) before the end of the year to raise up to $100 million, a person familiar with the plan said.

The VFX is a U.S. dollar-denominated exchange that started trading last October but has to date only attracted two company listings. The government hopes the bourse, which is owned by the Zimbabwe Stock Exchange (ZSE), will help lure foreign investors to a country grappling with foreign exchange shortages.

Finance Minister Mthuli Ncube has previously said Zimbabwe would try to tap into the international bond market to raise money for infrastructure. He did not answer phone calls seeking comment. Finance secretary George Guvamatanga did not respond to calls and messages on his phone either.

A banker who has been consulted and helped structure the bond sale said the state-owned Infrasture Development Bank of Zimbabwe (IDBZ) is arranging the bond listing while African Export-Import Bank (Afreximbank) will provide insurance credit.

Zimbabwe's last local bond sale was nearly two decades ago before its currency collapsed.

"It (bond sale) will happen before the end of the year. We are finalising the timing and the plan is to raise up to US$100 million," the banker told Reuters, declining to be named because of the confidential nature of the discussions.

Afreximbank and IDBZ did not respond to emailed requests for comment.

Afreximbank has been one of the few foreign lenders that has continued to provide credit to Zimbabwe after international institutions like the International Monetary Fund and African Development Bank stopped providing funding over arrears.

Zimbabwe owes foreign creditors more than $8 billion.

(Reporting by MacDonald Dzirutwe; editing by Emelia Sithole-Matarise) ((macdonald.dzirutwe@thomsonreuters.com; +263 4 799 112; Reuters Messaging: macdonald.dzirutwe.thomsonreuters.com@reuters.net))

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