Kenya’s first green bond lists on London Stock Exchange


Kenya’s first green bond lists on London Stock Exchange
President Uhuru Kenyatta addressed investors during the listing of Acorn Holdings green bond on the London Stock Exchange on January 20 PHOTO | COURTESY

In Summary

  • The cross-listing of the bond by Acorn Holdings at the LSE follows up the bonds introduction at the Nairobi Securities Exchange (NSE) on January 13.
  • The trading of the bond in shilling denominated terms is expected to cover the debt issuer from potential forex exchange volatility during amortization.
  • Acorn’s bond issue currently enjoys a global credit rating above Kenya’s sovereign rating from the Moody’s agency

Kenya’s first green bond has begun trading on the London Stock Exchange (LSE) as a shilling denominated bond.

The cross-listing of the bond by Acorn Holdings at the LSE follows up the bonds introduction at the Nairobi Securities Exchange (NSE) on January 13.

Having raised Ksh.4.3 billion in October 2019, proceeds from the bond are expected to be deployed in financing the construction of six student properties within Nairobi and its environs.

The initial listing of the bond at the NSE and its subsequent cross listing on Monday is expected to make available an extended pool of liquidity for subsequent new capital issues while providing room for potential exits by investors.

Meanwhile, the trading of the bond in shilling denominated terms is expected to cover the debt issuer from potential forex exchange volatility during amortization.

The Emerging Africa Infrastructure Fund (EAIF) is currently the largest single investor in the bond with a participation of Ksh.1.3 billion while sister firm GurantCo covers part of the investors risk on both principal and interest repayments.

The issue of Kenya’s first green bond follows the elevation in interest to climate-change conscious financing by capital market’s investors.

According to the Green Bonds Kenya Annual Report for 2018, the global green bond market has grown tremendously with net issuance ranging between Ksh.16 trillion ($155 billion) and Ksh.31 trillion ($300 billion) between 2017 and 2018.

The success of the privately issued bond is expected to draw lessons for the potential issuance of sovereign green bond by the government.

Acorn’s bond issue currently enjoys a global credit rating above Kenya’s sovereign rating from the Moody’s agency.

 

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Story By Kepha Muiruri
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