NAIROBI, Kenya, Jun 22 – Chase Bank Kenya’s first tranche of its Sh10 billion seven year multi-currency bond has started trading on the secondary market at the Nairobi Securities Exchange.
This will enhance the bond’s liquidity, while providing a good quality investment avenue for many investors who weren’t able to participate during the offer.
The Chase Bank issue recorded an impressive 161 percent subscription rate, netting Sh4.8 billion against the Sh3 billion on offer. The bank exercised a Green Shoe Option to ensure that all the investors who put in an application received an allocation.
Speaking during the bell ringing ceremony at the Nairobi Securities Exchange Trading Floor to officially launch trading, Chase Bank Chairman Zafrullah Khan noted the continued alignment of the bank’s growth efforts with Kenya’s Vision 2030 and how this has spurred continued investment while bringing more customers on board.
“The performance and listing not only highlights the confidence in the Chase brand, but also investor confidence in corporate bonds. This is in line with the growth of alternative investment opportunities within the Capital Markets as outlined under the Vision 2030,” he said.
With a coupon rate of 13.25pc, the offer’s pricing was hailed as underpinning investors’ confidence in the issue, with the underlying spread over the government yield curve being one of the lowest achieved in the recent history of Corporate issuance.
Funds raised through the bond issue are expected to enable Chase Bank maintain its steep growth trajectory, improving efficiency to bring more customers on board while improving its service offering to current clients.
Chase Group Managing Director Duncan Kabui singled this fact out for special mention due to the fact that though the bank was expanding its footprint, its relationship with its customers remained the main point of focus.
“Customer numbers grew 15.6pc to 375,000 in March 2015, up from 320,000 in December last year. This growth is testament to our unwavering focus on building a relationship of trust with our clients.” He said.
Sammy Ghanam from Genghis Capital who were the lead Transaction Advisor and Co Placing Agent for the bond issue and a Chase Bank associate company, said an upward shift in government yields as well as a marked increase in competing corporate issues in the Market has considerably constrained liquidity in the money market.”The issue of Chase Bank’s first bond is a culmination of its ability to bring on board offshore debt and equity partners”
The Chief Executive, Nairobi Securities Exchange, Geoffrey O. Odundo, noted: “Our promise to our investors is to assist them to Discover Opportunity. This resonates with the mission of the Chase Bank Group “Enable people achieve the things that matter the most”. We are therefore particularly delighted and honoured to celebrate with Chase Bank Group the beginning of a new chapter in your history as you make your debut as an issuer of listed securities.
This will be the second successful listing of corporate paper on the Nairobi Securities Exchange in 2015 after the Sh5 billion first tranche of East African Breweries Ltd’s 12.25pc, three year Sh11 billion note went to the secondary market in April.