INCREASED SUBSCRIPTION

CMA reports growing confidence in corporate bond market

As of June 30, the bond market turnover stood at Sh301billion

In Summary
  • This after the regulator noted the oversubscription of 245 per cent for the East African Breweries Plc medium term notes.
  • EABL received applications for nearly Sh38 billion, signalling enhanced interest in the corporate bond market.
Capital Markets Authority CEO Wyckliffe Shamiah.
Capital Markets Authority CEO Wyckliffe Shamiah.
Image: HANDOUT

The Capital Markets Authority (CMA) has noted enhanced issuer and investor confidence in the corporate bond market.

This after the regulator noted the oversubscription by 245 per cent for the East African Breweries Plc (EABL) medium term notes.

CMA had approved the issuance and listing of a five-year, fixed rate medium term note seeking to raise Sh11 billion.

However, EABL received applications for nearly Sh38 billion, signalling enhanced interest in the corporate bond market.

I am delighted with the performance of the EABL Medium Term Note which is a testament of the renewed interest in the corporate bond market with growing issuer and investor confidence,” said CMA Chief Executive, Wyckliffe Shamiah.

He added that in the last 11 months, the Authority has approved the issuance and listing of the Centum Investments Company Plc Sh4billion medium-term note with a Sh2 billion green shoe option, and the Sh8 billion multi-currency Family Bank medium-term note.

The latter recorded an oversubscription of 147 per cent.

As of June 30, the bond market turnover stood at Sh301billion, compared to Sh228billion registered in Q3 2020, a 32 per cent increase.

The proceeds of the EABL bond will be applied to various business requirements including working capital and capital expenditure in EABL and its subsidiaries in Kenya and within East Africa.

The medium term note programme will offers investors an interest rate of 12.25 per cent per annum payable semi-annually and will be listed on the Nairobi Securities Exchange on November 1 2021.