East African Breweries Plc has received applications for Notes amounting to KSh37.9 billion for its KShs 11 billion Medium-Term Note issue, representing an overall subscription of 345 percent, in Kenya’s single largest non-infrastructure corporate bond offer. This means that the issue was oversubscribed by 245 percent.
EABL said applicants in the offer, which was open for 15 days beginning October 6, 2021, will be allotted Notes of a minimum KShs 100,000 and the balance on a pro-rata basis in multiples of KSh10,000. The Notes will begin trading at the Nairobi Securities Exchange (NSE) in the coming week.
EABL Group CEO, Mrs. Jane Karuku, said the oversubscription is a demonstration of investors’ confidence in East Africa’s largest manufacturing business which will celebrate its centenary next year.
“We issued this Medium-Term Note based on our proven track record in the debt capital markets and we are pleased that investors have resoundingly expressed their confidence in this business, and the willingness to share value from our growth. The fact that this achievement was delivered in the face of depressed economic conditions further signifies the belief investors have in our strategy as this business turns 100 next year,” said Mrs. Karuku.
Risper Genga Ohaga, EABL’s Group CFO, said: “EABL is a robust player in the capital markets and this expression of confidence will support our strategy going forward. The subscription rate demonstrates that the market has the depth and sophistication to support significant corporate issuances. The application process was delivered through a digital platform, a first in Kenya and we received interest from a diversified group of investors. We are committed to continuously deliver strong returns for our business and investors.”
Commenting on behalf of Lead Arrangers, Absa Bank Kenya Plc Managing Director, Jeremy Awori, said: “Absa Bank and Absa Securities Limited are proud to have worked with our client EABL as the lead arranger on the issue which was extremely successful with an oversubscription from a diverse pool of institutional and retail investors. The overwhelming success has been delivered on the backdrop of a challenging economic environment and is testament to the resilience of our private sector, the growing sophistication of our capital markets, and the important role played by strong financial institutions like Absa in facilitating growth. At Absa, we are committed to continue working with our clients to create financial solutions that match their growth ambitions.”
The five-year, fixed rate instrument is offered at an interest rate of 12.25 percent payable semi-annually. The offer was opened on October 6 and closed on October 21 and will be listed for trading on the Nairobi Securities Exchange from November 1.
EABL’s Medium-Term Note will be the biggest of the issued corporate bonds and commercial papers in the Kenyan market. It was arranged by Absa Bank Kenya Plc and Absa Securities Limited.
The funds will be used to finance investments in expanding production, repay debts taken in the ordinary course of business refinance short-term borrowings and provide working capital.
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