Family Bank raises Ksh.4 billion from bond

Lender 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 Tuesday saw solid demand from investors who sunk in Ksh.4.4 billion to beat the minimum target of Ksh.3 billion.

This to subsequently prompt the bank to exercise its Ksh.1 billion green-shoe option with the backing of the Capital Markets Authority (CMA) to take total acceptances to the Ksh.4 billion mark.

The five and a half year tenured bond is priced at 13 per cent per year.

Proceeds from the bond are expected to be deployed to 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 over a maximum five year period.

The new issue comes on the backdrop of the bank’s retirement of a Ksh.2 billion corporate bond in April this year.

The new bond has the approval of the CMA and is expected to list and trade on the Nairobi Securities Exchange (NSE) secondary corporate bonds market.