NIC Bank’s bid to grow its corporate client base as well as enhance its branch channels to reach more retail and SME customers is on track following the oversubscription of the bank’s bond issue.
The bond is the first issue under the Ksh 8 billion Medium Term Note Program that was recently approved by the Capital Markets Authority. The bond issue that was launched on August 21, 2014 was upsized to Ksh 5 billion from the original Ksh 3 billion.
The bond issue targeting institutional and retail investors received offers of Ksh 6.5 billion, representing a 30% oversubscription over the upsized amount of Ksh. 5 billion.
Institutional investors offered to take up 90% of the issue, while retail investors accounted for the remaining 10% of the bond issue.
“The success of the bond is a vote of confidence on the Bank’s long-term growth strategy. The money raised is critical in strengthening our capital base so as to support growth in our loan book for both the SME and corporate segments,†he said.“ This is a major milestone in support of our corporate strategy which calls for robust capital levels and a sustainable funding programme,†said NIC Bank Group Managing Director John Gachora.
The bank will list the medium-term note at the Nairobi Securities Exchange (NSE). The bond was available to investors with a yield of 12.5% and closed on September 3 2014. NIC Capital Limited, a subsidiary of NIC Bank Group, was the lead arranger for the transaction.