NAIROBI, Kenya, Nov 2 – The first Sh5 billion tranche of listed telecoms firm Safaricom’s corporate bond offer was oversubscribed by 50 percent.
The operator received applications of over Sh7.5 billion, in the initial medium term note of a Sh12 billion bond programme in the offer which closed on October 29.
“We are delighted by the uptake of this bond and the excitement it has generated in the market. This represents a validation of our strategic direction by the market,” said Safaricom CEO Michael Joseph.
The minimum amount that one required to invest in the bond was Sh1 million.
Allocations for the offer which is part of a capital raising initiative were completed on Friday October 30.
Most of the applications and allocations were for the fixed component although the notes had also been divided into a floating rate.
The fixed rate notes carry a coupon rate of 12.25 per cent per year, while the floating rate notes’ pricing will be pegged at 185 basis points above the most recent published rate for the 182-day Treasury Bill.
The bond is expected to begin at Nairobi Stock Exchange on November 30.
The success of the Safaricom bond and the just concluded KenGen Public Infrastructure Bond Offer points to the increased appetite in the long term debt instruments among Kenyans.
The PIBO whose target was Sh15billion raised Sh26.6 billion and its trading is expected commence on November 9.