KENYA – Financial institution Family Bank has raised US$41 million in fresh corporate bond, marking a subscription of 147.3 percent against a US$27.8 million target with a greenshoe option of US$9.3 million in its first tranche of the corporate bond offer via private placement.
A greenshoe option is an over-allotment option which gives an entity offering shares to the public to sell to investors more shares than initially planned by the issuer when the demand proves higher than expected. In this case, it allows the lender to raise more money through the medium-term note.
The bank was seeking to raise US$37.1 million, with a minimum subscription of US$927 or equivalent, with five and a half years (5 and ½ year) tenure priced at 13 percent per annum.
The issuance comes after the Bank successfully redeemed its five and a half years Medium Term Note worth US$18.6 million on 19th April 2021.
Family Bank CEO Rebecca Mbithi thanked institutional and individual investors who believed in the institution and its vision as it seeks to increase lending to micro, small and medium enterprises, and strengthen its capital base as it heavily invests in technology.
“On behalf of the Board of Directors and the Management at Family Bank, we would like to thank institutional and individual investors who have believed in the Bank and its vision as we seek to increase lending to MSMEs and strengthen our capital base as we heavily invest in technology,” said Family Bank Chief Executive Officer Rebecca Mbithi.
The Bank raised US$41 million, an oversubscription by 47.3 percent, from local fund managers, banks, retail investors, insurance companies and other institutional investors.
“We are delighted with the performance of the Family Bank Medium Term Note which is instrumental in reviving our corporate bond market. We have therefore allowed the Bank to take up from the investors the US$27.8 million that was approved for the first tranche and the extra US$9.27 million offered by the same pool of investors, which is the green shoe option,” noted Capital Markets Authority of Kenya Chief Executive Wyckliffe Shamiah.
The lead transaction advisors for the bond issue were NCBA Investment Bank and Genghis Capital with PricewaterhouseCoopers (PwC) as the reporting accountants, MTC Trust and Corporate Services Limited as the Note Trustees, Mboya Wangong’u & Waiyaki Advocates as the legal advisors and Tim-Sky Media Services as the Media and Public Relations consultants.
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