East African Breweries’ medium-term note has been oversubscribed by 245 per cent with the brewer receiving KSh37.9 billion.
The brewer had targeted to raise KSh11 billion in debt in an offer that was open for 15 days beginning October 6, 2021.
“The fact that this achievement was delivered in the face of depressed economic conditions further signifies the belief investors have in our strategy as this business turns 100 next year,” said EABL Group CEO Jane Karuku.
The funds will be used to finance investments in expanding production, repay debts taken in the ordinary course of business, refinance short-term borrowings and provide working capital.
“EABL is a robust player in the capital markets and this expression of confidence will support our strategy going forward. The subscription rate demonstrates that the market has the depth and sophistication to support significant corporate issuances,” said Risper Genga Ohaga, EABL’s Group CFO.
The medium-term note programme will offer investors an interest rate of 12.25 per cent per annum payable semi-annually and will be listed on the Nairobi Securities Exchange on 1 November 2021.
According to the Capital Markets Authority, it has enhanced growing issuer and investor confidence in the corporate bond market.
CMA Chief Executive Wyckliffe Shamiah noted that in the last 11 months, the Authority has approved the issuance and listing of the Centum Investments Company Plc Ksh 4 billion medium-term note with a Ksh2 billion greenshoe option, and the Kshs8 billion multicurrency Family Bank medium-term note.
The latter recorded an oversubscription of 147 per cent.
As of June 30, 2021, the bond market turnover stood at Kshs301 billion, compared to Kshs.228 billion registered in Quarter 3, 2020, recording a 32 per cent increase.