Through a corporate bond issue, Britam received bids totaling 7.32 billion Kenyan shillings doubling its initial target of 3 billion Kenyan shillings, a 144 per cent over the subscription level. The financial services firm, first tranche had an overallotment option.
“We are happy to note that the bond market has opened up and that Britam has taken this up successfully as one of the ways to raise funds,” Francis Muthaura, board chairperson at Britam said.
The offer opened in June with a minimum subscription per client at 100,000 Kenyan shillings with additional multiples of 50,000 Kenyan shillings.
The Capital Markets Authority (CMA) gave the green light of the issuance of a corporate bond by Britam medium term note on June 6 to be used to fund strategic business initiatives.
The medium term note is a five-year tenor offering a 13 per cent fixed interest rate payable twice a year.
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Listed on the Nairobi Securities Exchange (NSE)’s Fixed Income Securities Market Segment, Britam expects the proceeds to be spent on ongoing and new real estate projects, strategic initiatives like investment in private equity, local and regional business growth and Information Communication and Technology (ICT). Britam is set to buy Equity Bank’s entire stake in Housing Finance, once it gets a nod from the CMA.
Muthaura encouraged other players in the sector to take corporate bonds as this will help build the country’s bond market.
“We are also happy that we have joined companies that have successfully listed their bonds at the Nairobi Securities Exchange. At this stage, we continue to play a big role in the financial sector,” Muthaura said.
The listed firm was in June 2014 incorporated in the Nairobi Securities Exchange (NSE) 20 Share Index after a review of the constituent counters. It is the first insurance sector stock in the benchmark index.
Yesterday, the firm launched operations in Rwanda, part of the company’s bid to expand its footprint in the East African region. Britam also recently launched its county strategy seeking to spread across Kenya.
The firm actively traded 310,900 shares on Thursday and closed at 23.50 Kenya shillings.