NSE listed corporate bonds fall to 5 as Centum exits

The number of listed corporate bonds and commercial paper on the Nairobi Security Exchange (NSE) has fallen to five with Centum Investment retiring its debt on Monday.

The investment firm successfully repaid Ksh.6.6 billion which was the full amount outstanding on the five-year corporate public bond inclusive of accrued interest.

Centum has now fully retired all of its medium and long term debt having repaid Ksh.7.8 billion ($75 million) of US denominated debt in September 2019.

The firm now expects the payment to strengthen its balance sheet position and liquidity through the release of Ksh.1.8 billion spent previously in debt interest costs.

“The strengthening of the capital structure of Centum through the repayment of its debt and the enhancement of liquidity is one of the five core pillars of Centum 4.0 Strategy. I am pleased that 14 months into the strategy period and despite the difficult economic environment which has been exacerbated by the economic shocks arising from the Covid-19 pandemic,” noted Group CEO James Mworia.

“We have delivered on this critical strategic objective. We have in the same period significantly enhanced liquidity which is the second aspect of this strategic pillar by Ksh 6.7 Billion.

The redemption now leaves five listed commercial bond/papers including East African Breweries Limited (EABL) and the CBA fixed medium term notes which mature in March 2022 and December 14, 2020 respectively.

The lack of new issues driven by a loss of confidence in the portfolio has seen the counter dry up in New Year’s following recent defaults.

As issued paper matures without replenish on the counter, Kenya’s corporate bond market has been hit a dry spell as both issuers and investors stay off.

Among the troubled commercial paper sitting in the market include the Ksh.1.3 billion bond by Real People issued in June 2015 and the medium term notes by the now defunct Imperial and Chase Bank(s) maturing on December 21 and June 2022 respectively.

According data from the Capital Markets Authority (CMA), there were only six outstanding commercial papers valued at Ksh.38.1 billion at the end of December 2019 against 20 commercial papers valued at Ksh.61.9 billion at the end of 2018.

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