The Capital Markets Authority (CMA) has granted approval to Family Bank Limited to take up a green shoe option of Kshs1 billion after the first tranche of its multicurrency Medium Term Note (MTN) recorded an oversubscription of 147.3 percent.
Early in June, the Authority allowed the Bank to issue an Ksh8 billion multicurrency Medium Term Note (MTN) programme in tranches. The first tranche comprising Kshs3 billion with an approved green shoe option of Kshs1 billion was issued on 8 June 2021. It was fully subscribed, raising Kshs4,417,710,00 from local fund managers, banks, retail investors, insurance companies and other institutional investors.
‘This morning, 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 Kshs3 billion that was approved for the first tranche and the extra Kshs1 billion offered by the same pool of investors, which is the green shoe option.’ CMA Chief Executive Wyckliffe Shamiah noted.
The funds raised from the bond are expected to be used to strengthen the bank’s capital base to support growth, investment in IT infrastructure, new product initiatives and onward lending.
The MTN programme will be issued as both Fixed Rate Notes and Floating Rate Notes. The notes will have a maturity period of not less than five years. The Floating Rate Notes will bear fixed interest payable on dates to be specified in the Pricing Supplement, while the Floating Rate Notes will bear interest benchmarked against the prevailing Treasury Bill rate. The Kenya Shillings denominated notes will be listed on the Fixed Income Securities Market Segment of the Nairobi Securities Exchange.