Britam pays off Sh6.25bn bond ahead of maturity

Insurance group Britam Holdings #ticker:BRIT has redeemed its corporate bond nine months ahead of its expected maturity date of July 15, 2019, paying investors, including Equity Bank #ticker:EQTY and Commercial Bank of Africa, a total of Sh6.25 billion.

The amount paid comprised the principal of Sh6 billion and interest of Sh255 million that had accrued since the last interest payment date of July 16, 2018.

Equity was the biggest investor in the insurer’s bond which had a fixed interest rate of 13 per cent per annum.

The bank bought bonds with a face value of Sh1.2 billion. It was followed by Commercial Bank of Africa (Sh410.4 million), Family Bank (Sh410.4 million) and Chase Bank (Sh164.1 million).

The bond also attracted local high-net-worth individuals who invested some Sh348.6 million in the securities.

Britam paid the principal and interest to bondholders who were on record as of October 4, 2018. Early redemption of the debt was made possible by the receipt of a Sh5.7 billion equity investment from private equity fund AfricInvest, which was allotted a 14.3 per cent stake in the insurer.

Britam’s borrowings, which stood at Sh8.5 billion in June, are expected to decline significantly following the retirement of the bond. The insurer will also save some Sh780 million in annual interest expenses that it used to pay the bondholders.