The ALCB Fund has invested MZN 250 million (ca. USD 4 million) in a senior unsecured 2 year note with Banco Letshego S.A in Mozambique under a private placement Bond tranche arranged by Standard Bank Mozambique. Banco Letshego S.A.is a subsidiary of Letshego Holdings Ltd, providing financial services including loans and deposit solution predominately catered to civil servants.
The transaction will allow a first-time issuer to access the Mozambican debt capital market, enable the company to diversify its funding base beyond local banks and support loan book expansion. Other investors who participated in the three tranches included local institutional investors such as pension funds, insurance companies, and asset managers, enabling the company to cumulatively raise over MZN1.315 billion (ca. USD 21 million). The final of the three debut tranches successfully closed on August 28 2023.
This will be the ALCB Fund’s third investment in a subsidiary of Letshego Holdings,following investments in Letshego Ghana and Letshego Namibia. The ALCB Fund’s current total exposure to the group following this investment is USD 13.8million. Including Banco Letshego, the Fund has also cumulatively invested USD 15.3million in Mozambique, with an outstanding exposure of USD 9.1 million.
Brock Hoback, Fund Lead of the ALCB Fund, said: “We are delighted to have played a role in the first set of issuances by Banco Letshego, S.A. We know the importance of ensuring a successful first issuance, that creates the momentum and “proof of concept” needed for a business to see the domestic capital markets as a long-term sustainable source of financing. In addition, Mozambique remains a market of great interest to the ALCB Fund, with sound growth prospects and an improving enabling environment for debt capital market transactions. We hope by Banco Letshego SA issuing a bond it will act as a catalyst to encourage more companies to consider first time issuances in the country,which the ALCB Fund would be delighted to support”.
Carlos Nhamahango, Managing Director of Banco Letshego, S.A, said: “We are grateful for the support of the ALCB Fund. Having supported issuances of other Letshego Holding subsidiaries over many years, we look forward to continuing working with the Fund as we grow our local debt capital market funding following this successful set of issuances.”