Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Centum Real Estate raises Sh3bn from Project Bond Issue

NAIROBI, Kenya, Dec 18 – Centum Real Estate Limited has successfully raised Sh3 billion from a project bond intended to finance construction of its ongoing housing projects.

The bond, which closed on Wednesday this week, will pay investors a return of 12.5% for the plain vanilla bond and 12-14% for the Equity Linked Note.

The bond will be listed for trading on the Nairobi Securities Exchange once regulatory approval is secured.

The subscription level is 50% above the minimum target level of KES 2 Billion.

Centum Real Estate Managing Director Samuel Kariuki noted that the company was seeking to raise KSh. 4 billion in total over the next three years to fund its ongoing projects. The minimum target raise in this issue was KES 2 billion against which the KES 3 billion was raised, exceeding the minimum target by 50%.

The bond is structured as a medium term note where the Company may opt to re-open the offer prior to maturity to raise subsequent tranches in line with construction funding needs which are spread out over a period of time.

The three-year paper matures on December 16, 2023.

The Corporate bond attracted a diversified investor profile from the banking sector, pension funds, asset management and individual investors.

“The Medium-Term Zero-Coupon Bond is the first such structured instrument to be issued by a corporate in Kenya and we are therefore pleased with the outcome, despite the very bearish corporate bond market, tight liquidity and a difficult economic environment. It is a huge demonstration of confidence in Centum RE and we are grateful for the confidence that investors have shown in us”, said Samuel Kariuki.

Advertisement. Scroll to continue reading.

“Investors are now regaining confidence in the Corporate Bond market after the negative experience in 2019,” said Kabaki Wamwea, CEO of Private Wealth Capital, the Lead Arrangers of the Centum Real Estate Bond. “We expect trading to be vibrant in the secondary market given the attractive structure of the bond,” he added.

Centum Real Estate has a portfolio of 1,482 housing units under construction, out of which 1,202 units are already pre-sold. “Despite the economic slowdown caused by the Covid-19 pandemic, we have recorded over KES 1 billion in customer deposits collections since April 2020 and closed KES 3 billion in land sales” noted Kariuki.

All customer deposits received from beneficiary projects post the bond settlement date will be channeled into a sinking fund over which bond holders have a fixed charge, an innovative way to protect bond investors.

Centum Real Estate completed and handed over two projects in Vipingo and Pearl Marina in Entebbe, Uganda in October 2020. The third affordable housing in Vipingo is due for handover in January next year.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...