DBN goes a-borrowing Augetto Graig Thursday, September 18, 2014 - 12:45 News The Development Bank of Namibia (DBN) has approached the Ministry of Finance for guidelines and rules to guide its intended efforts to raise N$2,5 billion by the end of 2018 to implement its first debt capital raising strategy. Currently the DBN boasts capital and reserves of N$2,5 billion accumulated since its inception in 2003 and consisting of mostly equity funding, retained earnings and reserves. Now and over the next five years the DBN wants to double that, maintaining a debt to equity ratio of 1:1. Over the next 12 months the DBN will look towards raising about N$200 million off the short end of the local money market, inviting potential investors through public invitations. Eventually all local pension funds, asset managers, state owned enterprises and commercial banks will be approached to participate in the funding process. Some of the rules expected to be approved by the finance ministry for DBN’s debt capital raising strategy include that debt capital raised will only be used for DBN’s enterprise portfolio and that the development bank shall raise short-term funding on the strength of its own balance sheet. For larger long-term funding, specifically in regional and international markets, government guarantees may be required to bring down borrowing costs. Also the DBN will always give preference to local currency and where capital is raised in foreign currency, all foreign exchange risks will be completely hedged.
Posted on: Sat, 20 Sep 2014 13:00:00 +0000
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