Family Bank has raised Ksh.4 billion from the first part of its new corporate bond issuance.
The first tranche of the bond which closed on June 22 saw solid demand from investors who sunk in Ksh.4.4 billion to beat the minimum target of Ksh.3 billion.
“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 lender received the backing of Capital Markets Authority (CMA) to take total acceptances to the Ksh.4 billion mark.
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“we are delighted with the performance of the family bank Medium Term Note, which is instrumental in reviewing our corporate bond market,” said CMA in a statement.
The five and a half year tenured bond is priced at 13 percent per year.
Proceeds from the bond are expected to be deployed to Micro Small and Medium Enterprises (MSME) lending and an upgrade of the lender’s technology infrastructure.
Family Bank is subsequently expected to follow up the opening issue with more secondary bond offers as it seeks to tap a total of Ksh.8 billion.
The new issue comes on the backdrop of the bank’s retirement of a Ksh.2 billion corporate bond in April this year.
The notes will have a maturity period of not less than five years.
According to CMA, the Floating Rate Notes will bear fixed interest payable on dates to be specified in the pricing supplement, while the Floating Rates Notes will bear interest benchmarked against the prevailing Treasury Bill rate.