26 November 2014
NIC Capital, the investment banking subsidiary of the NIC Bank Group, has been mandated as the Lead Arranger to help leasing firm Vehicle and Equipment Leasing Limited (VAELL) raise up to $95 million (Ksh 8.4 billion) through an asset-backed bond issue.
NIC Capital, ranked as the Investment Bank of the Year at the 2013 Think Business Capital Markets Awards, is expected to act as the lead arranger and placing agent for VAELL in the deal, which now awaits regulatory approval.
This is the first asset-backed bond issue in the market under the Capital Markets (Asset Backed Securities) Regulations, 2007.
“We are excited to be the lead arranger on this deal. We have seen a healthy appetite for debt and equity in the market this year and are optimistic about this asset-backed securities deal. The company will be using the proceeds to support their balance sheet growth by creating additional assets,” said NIC Capital Managing Director Maurice Opiyo.
VAELL is a family owned business established eight years ago in Nairobi. The company has expanded into five African countries as part of their growth strategy (Kenya, Uganda, Tanzania, Rwanda and Zambia).
“The market did not take to leasing immediately but over time companies and government are seeing the benefits of leasing equipments and vehicles and this has seen us grow our business,” said VAELL Managing Director Mike Mulili.
Appetite in the Kenyan market has seen NIC Capital close several notable transactions this year including the CIC Bond, NIC Bond, NIC Bank Rights Issue, K-Rep Bank sale of 69.1% stake, Faulu Kenya sale of a 65% stake, Kenyan women Microfinance Bank sale of a 25% stake to strategic investors among many others.
In August, NIC Capital also signed a deal as the arranger for Ksh 5.0 billion for South African micro financier Real People Investment Holdings Ltd.
Recent bond issues have been oversubscribed owing to a growing investor appetite for double digit earnings. CIC Insurance Group recorded a 111 per cent oversubscription on its Sh3 billion medium-term note programme, attracting Ksh 6.34 billion worth of offers; while NIC Bank’s recent Sh3 billion bond issue received offers of Ksh 6.5 billion. The bank took up Ksh5.5 billion.
For further information, please contact: NIC Bank’s Marketing & Communications Manager, Lena Karauri-Sitoyo, firstname.lastname@example.org or +254 20 2888390