, NAIROBI, Kenya, Aug 21 – NIC Bank has launched the sale of a Sh3 billion bond as the first part of a strategy of raising capital through a bond and Rights Issue to fund future business growth.
The bond is part of a major capital-raising program as it seeks to grow its corporate client base as well as to enhance its branch channels to reach more retail and Small Medium Enterprises (SMEs) customers across the region.
Investors in the bond will earn a yield of 12.5 percent, available to investors from August 21, 2014 to September 3, 2014 while the minimum investible amount in the bond, which will be listed on the Fixed Income Securities Investment Segment of the Nairobi Securities Exchange (NSE), is Sh100,000.
The launch follows the bank’s approval early this month of Sh8 billion corporate bond program by the Capital Markets Authority (CMA).
The medium term note program allows the bank to issue up to Sh8 billion in subordinated notes over the next five years.
“This launch is a major milestone in executing our corporate bond program. The cash raised will be critical in strengthening our capital base so as to underpin growth in our loan books for both the retail and business segments,” NIC Bank Group Managing Director John Gachora said.
NIC Capital Limited, a subsidiary of NIC Bank Group, has been mandated as the lead arranger for the transaction.
According to NIC Capital Managing Director Maurice Opiyo, the bond provides investors with an opportunity to diversify their fixed income portfolios at a good return on investment.
“We expect good uptake for the issue, based on the yield and the NIC Bank investment case. We invite investors to take advantage of this opportunity,” said Opiyo.
The bank also plans to raise Sh2 billion through a Rights Issue subject to getting CMA approval.