CfC Stanbic Bank’s KES 4bn subordinated and unsecured Tier II fixed rate bond has been oversubscribed by 27pc.
This was the first tranche of the Bank’s KES 5bn multi-currency medium term note programme which also allows for the issue of credit-linked notes.
The 7-year bond jointly arranged by the CfC Stanbic Bank and SBG Securities raised KES 5.08bn with fund managers taking 88pc of the notes. Insurance companies and retail investors received 9pc and 3pc respectively.
“The proceeds of the issue will be applied by the issuer for general corporate purposes and future growth,” CfC Stanbic indicated in its information memorandum last year.
CfC Stanbic Bank Chief Executive Greg Brackenridge said the success of the bond demonstrates a robust investor appetite for bonds and the strong faith investors have in the bank.
Mr. Brackenridge said that the bank will continue to make gains in providing longer term loans to both personal and business customers, adding that the bond will better match the average tenor of the bank’s funding with the average tenor of customer loans and advances.
The bond, priced at a fixed coupon rate of 12.95pc, also qualifies as Tier II capital further strengthening the bank’s already sound total capital position. Interest will be paid semi-annually in June and December each year starting in June 2015.
With three previous bonds, the financier is one of the more prolific corporate debt issuers on the Kenyan market, with this being the Bank’s largest ever single bond issue to date.