August 21, 2014
Listed lender NIC Bank has today launched the sale of a Ksh3 billion bond as the first part of an ambitious fund-raising exercise.
This is part of the bank’s two pronged strategy of raising capital through both a bond and a Rights Issue, to fund future business growth.
Investors in the bond will earn a yield of 12.5 per cent. It will be available to investors from 21st August 2014 to 3rd September 2014.
The launch follows the approval, early this month, of NIC’s Sh8 billion corporate bond program by the Capital Markets Authority (CMA). The medium term note program allows the bank to issue up to Ksh8 billion in subordinated notes over the next five years.
NIC Bank Group Managing Director John Gachora said the debt issuance program, which is in the form of a Subordinated Medium Term Note, will be done through a number of tranches.
“This launch is a major milestone in executing our corporate bond program. The cash raised will be critical in strengthening our capital base so as to underpin growth in our loan books for both the retail and business segments,” he said.
NIC Capital Limited, a subsidiary of NIC Bank Group, has been mandated as the lead arranger for the transaction.
According to NIC Capital Managing Director Maurice Opiyo, the bond provides investors with an opportunity to diversify their fixed income portfolios at a good return on investment.
“We expect good uptake for the issue, based on the yield and the NIC Bank investment case. We invite investors to take advantage of this opportunity,” said Mr Opiyo. The minimum investible amount in the bond, which will be listed on the Fixed Income Securities Investment Segment of the Nairobi Securities Exchange, is Ksh100,000.
The bond issue is part of a major capital-raising program initiated by NIC Bank as it seeks to grow its corporate client base as well as to enhance its branch channels to reach more Retail and SME customers across the region. As part of this plan, NIC Bank also plans to raise Ksh2 billion through a Rights Issue subject to getting CMA approval. NIC Bank Group Chairman James Ndegwa told shareholders at a recent EGM that the bank had decided to go for a combination of debt and equity as the most optimal option to finance business growth.
For further information, please contact:
NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390