Capital FM (Nairobi)

12 August 2014

Kenya: NIC Gets Nod to Raise Sh8 Billion Via Corporate Bond

Nairobi — NIC Bank has been given approval by the Capital Markets Authority (CMA) to raise Sh8 billion through a corporate bond.

This paves the way for the listed lender to raise additional capital for expansion through debt issuance.

The medium term note program allows the bank to issue up to Sh8 billion in subordinated notes over the next five years.

NIC Bank Group Managing Director John Gachora says the debt issue will be issued in a number of tranches over the next five years with the first tranche expected this month.

"The approval by the CMA allows us to enter the next phase of the transaction. We expect to be in the market with the first tranche this month," he said.

Gachora said that the money would be used to strengthen the bank's capital base to support planned growth in lending to the retail and business segments.

NIC Capital Limited, a subsidiary of NIC Bank Group, is the lead arranger for the transaction.

According to NIC Capital Managing Director, Maurice Opiyo, the bond provides the company an opportunity to tap the favourable conditions prevailing in the debt market to raise additional capital as it gears to strengthen its presence in the region.

"Investor appetite for debt securities has been positive going by the success of recent bond issues," said Opiyo.

The minimum lot investors can apply for in the bond, which will be listed on the Fixed Income Securities Investment Segment of the Nairobi Securities Exchange, is Sh100,000.

In addition to the bond issue, NIC also plans to issue Sh2 billion through a rights issue.

NIC Bank Group Chairman James Ndegwa told shareholders last week that the firm considers a combination of debt and equity as the right mix to finance business expansion.

Ads by Google

Copyright © 2014 Capital FM. 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 publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.