GUIDELINES FOR THE ISSUANCE OF CORPORATE BONDS, MUNICIPAL BONDS AND COMMERCIAL PAPERS Issued by: CAPITAL MARKETS AND SECURITIES AUTHORITY - TANZANIA Issue Date: September, 2019 1 Contents 1. INTRODUCTION .................................................................................................................... 5 1.1. Legal and Regulatory Oversight ..................................................................................... 5 1.2. Rationale for the Guidelines ............................................................................................. 6 1.3. General Scope of the Guidelines .................................................................................... 7 PART 1: GUIDELINES FOR THE ISSUANCE OF CORPORATE BONDS ............................... 10 1.1 Scope ...................................................................................................................................... 10 1.2 Prospectus or Offering Memorandum ......................................................................... 10 1.3 Approval and Fees.............................................................................................................. 10 1.4 Other Requirements .......................................................................................................... 10 1.4.1 Solvency Requirements ................................................................................................... 11 1.4.2 Assessment of Leverage .................................................................................................. 11 1.4.3 Accountant’s Report .......................................................................................................... 11 1.4.4 Guarantee Bond .................................................................................................................. 12 1.4.5 Publication of Accounts .................................................................................................... 12 1.4.6 Size of Issue ......................................................................................................................... 12 1.4.7 Timing ..................................................................................................................................... 13 1.4.8 Announcement .................................................................................................................... 13 1.4.9 Advisers .................................................................................................................................. 13 1.4.10 Placing Agents ..................................................................................................................... 13 1.4.11 Receiving Bank .................................................................................................................... 13 1.4.12 Registrar ................................................................................................................................ 13 1.4.13 Legal advisor ........................................................................................................................ 14 1.4.14 Reporting Accountant ....................................................................................................... 14 1.4.15 Securities to be Issued ..................................................................................................... 14 PART 2: GUIDELINES FOR THE ISSUANCE OF MUNICIPAL BONDS ................................. 15 2.1 Scope ...................................................................................................................................... 15 2.2 Ultimate Responsibility ..................................................................................................... 15 2.3 Prospectus or Offering Memorandum ......................................................................... 16 2.4 Size of Issue ......................................................................................................................... 17 2.5 Performance Bond and Contracts ................................................................................ 18 2 2.6 Bridge Finance from borrowing ..................................................................................... 18 2.7 Approval and Fees.............................................................................................................. 18 2.8 Timing ..................................................................................................................................... 19 2.9 Announcement .................................................................................................................... 19 2.10 Advisers .................................................................................................................................. 19 2.11 Placing Agents ..................................................................................................................... 19 2.12 Receiving Bank .................................................................................................................... 19 2.13 Registrar ................................................................................................................................ 20 2.14 Legal advisor ........................................................................................................................ 20 2.15 Reporting Accountant ....................................................................................................... 20 2.16 Securities to be Issued ..................................................................................................... 20 2.17 Publication of Accounts .................................................................................................... 20 2.18 Special Conditions for Issuance of Municipal Bonds by Special Purpose Vehicles (SPVs) ..................................................................................................................................... 20 2.18.1 Share Capital ........................................................................................................................ 20 2.18.2 Governance Structure ...................................................................................................... 21 2.18.3 Track- Record ...................................................................................................................... 21 2.18.4 Bridge Finance from borrowing ..................................................................................... 21 PART 3: GUIDELINES FOR THE ISSUANCE OF COMMERCIAL PAPERS ............................ 22 3.1 Scope ...................................................................................................................................... 22 3.2 Prospectus or Offering Memorandum ......................................................................... 22 3.3 Approval and Fees.............................................................................................................. 22 3.4 Other Requirements .......................................................................................................... 22 3.4.1 Solvency Requirements ................................................................................................... 23 3.4.2 Leverage ................................................................................................................................ 23 3.4.3 Offering Memorandum ..................................................................................................... 23 3.4.4 Publication of Accounts .................................................................................................... 24 3.4.5 Commercial Paper Programme Size ............................................................................ 24 3.4.6 Announcement .................................................................................................................... 24 3.4.7 Advisers .................................................................................................................................. 25 3.4.8 Placing Agents ..................................................................................................................... 25 3 3.4.9 Legal advisor ........................................................................................................................ 25 3.4.10 Reporting Accountant ....................................................................................................... 25 3.4.11 Securities to be Issued ..................................................................................................... 25 3.4.12 Receiving Bank .................................................................................................................... 25 3.4.13 Registrar ................................................................................................................................ 25 3.4.14 Guaranteed Paper .............................................................................................................. 26 SCHEDULE 1: CONTENTS OF THE PROSPECTUS ..................................................................... 27 ANNEX 1: FINANCIAL RATIOS ........................................................................................................ 36 ANNEX 2: GLOSSARY.......................................................................................................................... 40 4 1. INTRODUCTION Bonds and commercial