I&M Bank Tanzania has launched its inaugural Hatua Bond, giving investors an opportunity to subscribe to the first tranche of a TZS100 billion (KES4.9 billion) five-year Medium Term Note (MTN) programme.
The first bond issue is targeting TZS20 billion (KES978 million), with a TZS5 billion (KES244 million) greenshoe option that could increase the total amount raised to TZS25 billion (KES1.22 billion).
The senior unsecured bond carries a fixed annual coupon of 13%, with interest paid quarterly. It will be listed on the Dar es Salaam Stock Exchange (DSE), with issuance scheduled for September 21, 2026.
How to invest in the I&M Bank Tanzania Hatua Bond
The minimum investment required for the I&M Bank Hatua Bond is TZS500,000 (KES24,445).
An investor subscribing to the bond would commit a minimum of TZS500,000 for a five-year period and receive quarterly coupon payments at a fixed annual rate of 13%.
The bond is the first tranche of I&M Bank Tanzania’s TZS100 billion MTN programme and is scheduled to be issued on September 21, 2026.
The bond will subsequently be listed on the DSE.
What is the minimum amount to invest?
The minimum subscription amount is TZS500,000. Based on the provided exchange rate, this is equivalent to approximately KES24,445.
Investors can therefore participate in the Hatua Bond with an initial investment of TZS500,000 or more, subject to the applicable subscription terms.
How much does a TZS500,000 investment pay?
The Hatua Bond has a fixed coupon rate of 13% per annum, paid quarterly. For an investment of TZS500,000, the annual coupon would be:
TZS500,000 × 13% = TZS65,000
Since the coupon is paid four times a year, the quarterly payment would be:
TZS65,000 ÷ 4 = TZS16,250
An investor holding TZS500,000 of the bond would therefore receive TZS16,250 every quarter.
How much will investors earn over five years?
The Hatua Bond has a five-year tenor, equivalent to 20 quarterly coupon periods. At TZS16,250 per quarter, an investor holding the minimum TZS500,000 investment would receive:
TZS16,250 × 20 = TZS325,000
in total coupon payments over the five-year period.
At maturity, the investor would receive the original TZS500,000 principal.
This gives total cash receipts of TZS825,000 over the five years, consisting of TZS325,000 in coupon payments and TZS500,000 in principal repayment, assuming the bond is held to maturity and the stated terms remain applicable.
No withholding tax on coupon payments
The Hatua Bond’s coupon payments are 100% exempt from withholding tax, according to the provided issue information.
For the minimum TZS500,000 investment, the quarterly coupon is therefore TZS16,250 without a withholding tax deduction under the stated tax treatment.
Over 20 quarterly payments, the total coupon received would be TZS325,000.
When will the I&M Bank Tanzania bond be issued?
The inaugural Hatua Bond is scheduled for issuance on September 21, 2026. The bond is the first tranche under I&M Bank Tanzania’s TZS100 billion MTN programme.
The initial target is TZS20 billion, while the additional TZS5 billion greenshoe option could increase the size of the first issue to TZS25 billion.
Can investors sell the bond before maturity?
The Hatua Bond will be listed on the Dar es Salaam Stock Exchange, meaning it can be traded in the secondary market after listing, subject to the applicable market conditions and trading arrangements.
An investor who does not want to hold the bond for the full five years can therefore seek to sell the security in the secondary market.
The amount received when selling before maturity will depend on the prevailing market price. Trading activity and demand for the bond can also affect how easily an investor can sell the security.
What happens to the bond at maturity?
The Hatua Bond has a five-year tenor. An investor who holds the bond until maturity would continue receiving the quarterly 13% coupon payments during the five-year period.
At the end of the five years, the principal amount invested would be repaid.
For example, an investor who subscribes for TZS500,000 would receive TZS16,250 every quarter and, after 20 quarterly payments, receive the TZS500,000 principal at maturity, based on the stated terms.
What are the risks of investing in the Hatua Bond?
The Hatua Bond is a senior unsecured bond. Unlike a secured bond, it is not backed by specific physical collateral. Repayment therefore depends on the financial position and ability of I&M Bank Tanzania to meet its obligations.
Investors also face liquidity risk if they choose to sell the bond before maturity. The ability to sell quickly and the price obtained will depend on activity in the secondary market.
For investors whose funds are ultimately measured in Kenyan shillings, there is also currency risk. Changes in the Tanzanian shilling against the Kenyan shilling can affect the value of returns when converted into KES.