Jevans Nyabiage
2 November 2009
Nairobi — Safaricom, has closed its Sh5 billion bond offer to the Kenyan market with a 50 per cent over-subscription.
The company received applications for over Sh7.5 billion against the Sh5 billion that had been put on offer.
This amount represents the first tranche of a Sh12 billion bond programme the firm has put together.
The bond offer, part of an extensive capital-raising initiative which the company is implementing, closed on Thursday while allocations were completed on Friday last week.
The notes had been divided into two options; one with a fixed rate and the other with a floating rate.
Most of the applications and allocations were for the fixed component.
The fixed rate notes carry a coupon rate of 12.25 per cent per year, while the floating rate notes' pricing will be pegged at 185 basis points above the most recent published rate for the 182-day Treasury Bill.
"We are delighted by the uptake of this bond and the excitement it has generated in the market. This represents a validation of our strategic direction by the market. Safaricom will be using the funding for general corporate capital purposes including the rollout of some critical projects," said Safaricom CEO Michael Joseph.
The issue was arranged by CFC Stanbic Bank and CFC Stanbic Financial Services, Barclays Bank of Kenya and Barclays Financial Services Ltd in association with Absa Capital, a division of Absa Bank Limited.
The joint sponsoring stockbrokers were CFC Stanbic Financial Services and Kestrel Capital (East Africa) Ltd.
The reporting accountants on the issue is PricewaterhouseCoopers, while the transaction's legal counsel is Kaplan & Stratton.
Legal counsel to Safaricom on the deal is being provided by Daly & Figgis, the fiscal and calculation agent is CFC Stanbic Bank, while the registrar is Livingstone Registrars.
With the issue of the Sh5 billion medium term note programme, Safaricom has entrenched a long-standing relationship with the Kenyan corporate bond market.
In 2001, the operator launched a bond for Sh4 billion the principal for which was repaid between September 2003 and March 2006.
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