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Consolidated floats Sh4b Bond

NAIROBI, Kenya, Jul 9 – The Consolidated Bank on Monday launched a Sh4 billion Corporate Bond which runs through to July 20.

The bank’s Chief Executive Officer Ndegwa Wachira said the Bond has been divided into two tranches of Sh2 billion each, one this year and the other in 2013.

Speaking during the launch, Ndegwa said the minimum subscription for the seven-year bond will be Sh100,000 and integral multiples of the same amount in excess thereof.

“We looked at the market and we decided to go for Sh2 billion initially, which starts after this launch. Then thereafter we will look at the market and come back for the other Sh2billion,” said Wachira.

“If for any reason we happen to experience some under subscription, then we can go back to the drawing board and decide what to do.”

The bank which is 100 percent owned by the government targets to use the money to increase its lending book to Sh18 billion by 2014 so as to extend more credit to the Small and Medium Enterprises.

“We are targeting the funds managers, the pension schemes and organisations with long-term investment strategies,” added Wachira.

The Treasury Permanent Secretary Joseph Kinyua said that the bank may be privatised by the end of the year to allow more growth.

He said: “The government does not have any reason to keep hanging on, in the banking sector. I don’t think It is a good idea for us to be everywhere in the banking sector. So the intention is to offload our total ownership, to other private investors.”

The bonds will start trading at the Nairobi Securities Exchange on August 2.

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