CMA observes enhanced confidence in the corporate bond market

Nairobi, 26 October 2021…The Capital Markets Authority (CMA) has noted enhanced issuer and investor confidence in the corporate bond market with the oversubscription of 245 percent reported for the  East African Breweries Plc (EABL) medium-term notes.

CMA had approved the issuance and listing of a five-year, fixed-rate medium-term note seeking to raise Kshs11 billion but EABL received applications for nearly Ksh38 billion, which signalled enhanced interest in the corporate bond market.

‘I am delighted with the performance of the EABL Medium Term Note which is a testament of the renewed interest in the corporate bond market with growing issuer and investor confidence.’ CMA Chief Executive Wyckliffe Shamiah noted.

He added that in the last 11 months, the Authority has approved the issuance and listing of the Centum Investments Company Plc Kshs4 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 percent. 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 percent increase.

The proceeds of the EABL bond will be applied to various business requirements including working capital and capital expenditure in EABL and its subsidiaries in Kenya and within East Africa.

The medium term note program will offer investors an interest rate of 12.25 percent per annum payable semi-annually and will be listed on the Nairobi Securities Exchange on 1 November 2021.