The Commission d’Organisation et de Surveillance des Opérations de Bourse (COSOB), Algeria’s Financial Market Authority, has granted approval for the issuance of bonds by Maghreb Leasing Algérie (MLA). This bond issuance, totaling 2 billion Algerian dinars, is targeted at institutional investors and is expected to support the company’s financial operations, particularly in leasing activities.
Key Details of the Bond Issuance:
• Total Issuance Amount: 2 billion Algerian dinars (approximately $14.5 million USD)
• Number of Bonds Issued: 200,000 bonds
• Nominal Value per Bond: 10,000 Algerian dinars (approximately $72.50 USD)
• Repayment Terms: Annual linear amortization of 20% of the capital invested
• Duration: 5 years
• Yield Rate: 5.40%
Return on Investment (ROI)
The bond issuance offers investors a stable return over its 5-year duration. Here’s a breakdown of the returns per bond, based on its nominal value of 10,000 DZD:
1. Annual Principal Repayment:
Each bondholder will receive 20% of the bond’s nominal value annually, amounting to 2,000 DZD per year.
2. Annual Interest Payment:
Interest is calculated at a rate of 5.40% on the outstanding balance of the bond each year:
• Year 1: 10,000 DZD × 5.40% = 540 DZD
• Year 2: 8,000 DZD × 5.40% = 432 DZD
• Year 3: 6,000 DZD × 5.40% = 324 DZD
• Year 4: 4,000 DZD × 5.40% = 216 DZD
• Year 5: 2,000 DZD × 5.40% = 108 DZD
Total Interest Earned per Bond: 540 + 432 + 324 + 216 + 108 = 1,620 DZD
3. Total Return on Investment:
Including both the principal (10,000 DZD) and the total interest earned (1,620 DZD), the total payout per bond over 5 years is 11,620 DZD (approximately $84.20 USD).
4. Effective ROI:
The return on investment over 5 years is 16.2%, offering a competitive yield for institutional investors.
Total cost to Maghreb Leasing Algérie
Maghreb Leasing Algérie will pay a total of 324 million DZD (approximately $2.35 million USD) in interest to bondholders over the 5-year period. This is in addition to repaying the 2 billion DZD principal at the end of the maturity period.
Additional Information
Maghreb Leasing Algérie is issuing a total of 200,000 bonds with the goal of raising 2 billion DZD to finance its leasing activities. This marks the company’s fourth bond issuance since its inception. MLA has been a key player in Algeria’s financial leasing sector, operating successfully since 2006.
This bond issuance not only diversifies MLA’s funding sources but also provides institutional investors with a stable and attractive investment opportunity. With a competitive yield and a clear repayment structure, this issuance aligns with the company’s ongoing commitment to Algeria’s economic development.
Original press release from COSOB:
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