VENTURES AFRICA – Kenya’s Consolidated Bank has begun trading of a 1.7 billion shillings ($20 million) bond on the Fixed Income Market segment of the Nairobi Securities Exchange (NSE). This is the first corporate bond issued in the market at the NSE this year.
The listing follows the issue of the first tranche of the bank’s 4 billion shilling ($47 million) bond, which was launched on 9th July 2012. The seven year fixed-rate bond is tradable in denominations of 100,000 shillings ($1,200) and will pay an annual coupon rate of 13.25 percent annually.
David Wachira, Consolidated Bank’s chief executive said the funds invested in the bank from the bond Issue will be channeled towards small and medium enterprises, with the purpose of financing longer term facilities to expand customers businesses.
“The funding will be directed to businesses in various sectors which include: Project financing; Real Estate; Hospitality industry; Education among others,” said Wachira.
The bank is trying to position itself as the top SME bank in the region.
Eunice Kagane Chairperson, Consolidated Bank, said the bank was pleased with the uptake of the corporate bond which closed at a performance of 84 percent.
“This is indeed a strong indication of support for our bank from our customers and the wider market,” said Kagane.
Eddy Njoroge, chairman of the NSE applauded Consolidated Bank’s contribution to the growing debt market.
“One of the six Vision 2030 priority sectors is the Financial Services and the bond market reforms are a major project whose aim is to deepen the capital market by creating access to the capital markets. This is why we, at NSE are so excited with the Consolidated Bank listing today because it is in line with our own strategy as a company but more importantly in line with our national economic blue-print, the Vision 2030.,” said Njoroge.
Njoroge said three other listed banks intend to raise 7 billion shillings ($83 million) of capital to support their balance sheets and grow their business in the near future.
Esther Koimet, the Investment Secretary in the Ministry of Finance presided over the bell ringing ceremony which was attended by the Bank’s board, sector regulatory bodies including NSE, Capital Market Authorities (CMA), Ministry of Finance and Central Bank officials.