NAIROBI, Kenya, May 21 – Chase Bank has launched a Sh10 billion bond in a bid to raise additional capital to strengthen its capital base.
The fund will also boost their strategic initiatives which include strengthening their SME lending base, agri-business lending base, youth and women enterprise lending base among others.
The Kenya shilling denominated notes will be listed on the Nairobi Securities Exchange and will be traded through any licensed stockbroker.
Chase Bank’s Chief Executive Officer Paul Njaga said the move will aid in maintaining the bank’s pace of growth.
“The bond will also be used to finance expansion of the bank’s branch networks as we also invest in IT and product development initiatives,” he said.
The bond will also see the enhancement of the bank’s digital platform which will be aimed at improving customer experience with the bank. The bank also launched its first tranche which is expected to raise Sh3 billion with a green shoe option of Sh2 billion.
Investors will need to invest a minimum of Sh100,000 upon entry, and multiples worth a minimum of Sh100, 000 thereafter.
Investors will earn a 13.1 percent interest over the seven year period.
Genghis Capital Invest Bank, an associate company of Chase Bank, through its associate director of corporate finance Samy Ghannam, said that the interest rate stipulated for the bond is the highest yielding of several corporate bonds issued over the last two years.
For instance, Commercial Bank of Africa’s interest rate was set at 12.75 per cent over a 6 year period while NIC Bank’s was 12.50 per cent over a five year period.
The bond’s interest rate is fixed and will be paid quarterly.