Muhereza Kyamutetera
9 July 2004
Kampala — East African Development Bank (EADB), will this month list its long-awaited $20 million (Shs40b) bond at the Nairobi Stock Exchange (NSE).
The bond comes at a seven-year fixed rate coupon of 7.5 percent and will be issued in two tranches, the first being in July and the subsequent one is for July 2005.
The two tranches mature in July 2011 and July 2012 respectively. Each tranche will be redeemed in 10 semi-annual installments beginning 2006. ccording to financial analysts the bond is expected to attract demand because the EADB bond is 0.75 basis points ahead of the most recent government Treasury Bond, which stands at a 6.75 percent fixed coupon rate.
The bond issue is expected to strengthen EADB's capacity to meet the rapidly growing demand for credit in the region. The bond is the seventh in a series of bonds issued by the bank in East Africa and the forth in the Kenyan market. EADB has in the past issued six bonds worth $90 million, of which $66 million has been redeemed while two bonds worth $24 million are yet attain maturity.
The bond, whose minimum subscription has been pegged at KShs1 million (UShs22m) and subject to a minimum initial subscription of KShs20 million (Shs440m) is mainly targeted at institutional investors.
The bond had by last Friday been approved by the Kenyan Capital Markets Authority for listing as a fixed income security.
According to EADB, capital raised through the bond will be used for financing earmarked projects in the telecommunication, energy, agriculture, transportation, mining and tourism sectors.
In 2002,the bank's board of directors approved financing of various projects of up to $8.5 million across various economic sectors in the three member countries of Kenya, Uganda and Tanzania mainly industry and agriculture sectors. As at December 31, last year, 24 percent of EADB's total lending ($31.8m) went to industrial enterprises, while 16 per cent ($21.7 million) went to agricultural enterprises.
Be the first to Write a Comment!
Copyright © 2004 The Monitor. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
