EABL goes for Ksh.11 billion debt in new corporate bond


EABL goes for Ksh.11 billion debt in new corporate bond

In Summary

  • The notes to be listed at the Nairobi Securities Exchange (NSE) have a tenure of five years with a fixed yield of 12.25 per cent per year to be paid every six months.
  • The offer opened to investors on Wednesday and is expected to close on October 21 while the subsequent listing of the notes on the NSE will occur on November 1.
  • Proceeds from the new corporate bond issue will be deployed in the settlement of specific short-term borrowings by EABL alongside the firm up of working capital.

Alcoholic beverages manufacturer East African Breweries Limited (EABL) has issued new medium term notes (MTN) from which it seeks to raise Ksh.11 billion in new debt.

The notes to be listed at the Nairobi Securities Exchange (NSE) have a tenure of five years with a fixed yield of 12.25 per cent per year to be paid every six months.

The offer opened to investors on Wednesday and is expected to close on October 21 while the subsequent listing of the notes on the NSE will occur on November 1.

Proceeds from the new corporate bond issue will be deployed in the settlement of specific short-term borrowings by EABL alongside the firm up of working capital.

EABL does not anticipate an increase in debt levels as a result of the issuance.

The new issue comes just four months shy from EABL’s retirement of a Ksh.6 billion MTN on June 28 this year in an early redemption which saw the company save on interest costs.

The new issue will come as good news for the NSE which has struggled to replenish its corporate debt counter in recent years as both issuers and subscribers shun the market.

Nevertheless, the counter has seen better tidings recently to include bonds by Family Bank (Ksh.4 billion) and Centum Real Estate Limited (Ksh.4 billion) in June this year and December 2020 respectively.

According to data from the Capital Markets Authority (CMA) the value of issued corporate bonds and commercial papers as of June 2021 stood at Ksh.23.9 billion.

This to include, EABL’s now redeemed Ksh.6 billion paper which was initially set to mature in March next year.

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Story By Kepha Muiruri
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