EABL corporate bond oversubscribed

East Africa Breweries Limited (EABL) has easily met its target of raising Ksh.11 billion from the corporate bond market with investors sinking just under Ksh.38 billion in the issue.

This to culminate in a 245 per cent rate of subscription to firm up the bond by the repeat issuer.

The Capital Markets Authority (CMA), which approved the issued paper, has termed the heavy investor interest in the paper as vote of confidence for corporate debt segment which has been striving to onboard new issuers.

“I am delighted with the performance of the EABL Medium Term Note which is a testament of the renewed interest in the corporate bond market with growing issuer and investor confidence,” noted CMA Chief Executive Officer Wycliffe Shamiah.

The new bond by EABL which comes in just months after the company’s retirement of a previous Ksh.6 billion bond in June is expected to replenish the pool of listed commercial papers on the Nairobi Securities Exchange (NSE) when it is added on the counter this Monday.

According to data from the Capital Markets Authority (CMA), the total outstanding amount of corporate bonds and commercial papers in Kenya as of the end of June 2021 stood at Ksh.16.8 billion.

This to include recent issues by Centum Real Estate Limited and by lender Family Bank.

EABL is expected to deploy proceeds from the commercial debt issue in boosting its working capital and clearing unspecified short-term borrowings maturing in the short-run.

The five-year timed paper has a yield of 12.25 per cent per annum payable every six months.