Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

KenGen PIBO closes

NAIROBI, Kenya, Sept 29 – Brokers witnessed a last minute rush for the KenGen Public Infrastructure Bond Offer (PIBO) that officially closed at 3pm on Tuesday.

Amish Gupta, an Associate Director with Standard Investment bank, the Lead Placing Agent for the offer said there was a renewed buzz and excitement around the offer following assurance of automated bond trading by November.

“Automated bond trading is said to be particularly appealing to foreign investors because it puts the KenGen PIBO as internationally compliant security with regard to international standards,” he said.

Mr Gupta expects the bond to raise the intended Sh15 billion but was guarded on whether it would be over subscribed because they\’re awaiting the full reconciliation to determine the amount raised from the applications received.

“At the moment we are sticking with the Sh15 billion because that’s what we can see so far.”

He said applications were still being collected and that it was expected agents would reconcile and batch the applications within a day to establish concrete results later in the week.

Central Depository System (CDS) settlements are also expected to be automated.

“This is particularly important for both local institution and foreign investors who see this bond as the first to be traded, delivered, settled and registered in an automated environment without any CDS settlement risks,” he said.

In the event  of an oversubscription KenGen Managing Director Eddy Njoroge said the company would employ a ‘green shoe’ option to take up to an additional Sh10 billion.

Advertisement. Scroll to continue reading.

A week ago Mr Njoroge highlighted the success of the PIBO saying the 60 percent threshold of Sh9 billion had been attained.

The PIBO is expected to start trading in the secondary market of the Nairobi Stock Exchange on November 9.

Twenty percent of the bond was available to the retail market while the remaining eighty percent set for both local and international institutional investors.

The decision to seek funds from the debt capital market is a break from the past where the company relied on development financial institution with inherent risks of foreign exchange fluctuations.

The offer opened on September 8 with a minimum investment of Sh100,000 with additional investments above the minimum in multiples of the Sh100,000.

The term of the bond is 10 years and interest will be paid in the first two years, while the principal sum will be redeemed every six months for eight years in equal installments.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...