Centum Investment Company Limited has received Capital Markets Authority (CMA) approval for the public listing of Kenya Shilling Six Billion through the issuance of fixed rate and equity linked notes on the Fixed Income Securities Market Segments (FIMS) of the Nairobi Securities Exchange (NSE). The tenor of the notes will be five (5) years.
The notes offer the public an opportunity be a part of Centum’s growth strategy for the 2014-2019 period which focuses on development of investment opportunities in eight key sectors – Real Estate, Energy, Financial Services, Education, Health, ICT, Agribusiness & FMCG.
The note issue will be a component of the funding applied to develop Centum’s proprietary opportunities specifically in the financial services, energy and real estate sectors.
The notes to be issued are senior unsecured fixed rate notes as well as senior unsecured equity linked notes (ELN). Interest on the notes will be payable semi-annually. The senior unsecured fixed rate notes will be issued at fixed interest rate of 13 %,
The Senior Unsecured Equity Linked Notes are made up of two components:
a) a fixed rate component issued at an interest rate of 12.5% and
b) a variable component which will carry an upside of up to 10 percent of the redemption price, subject to a 25 percent increase of Centum’s net asset value at the time of their maturity
The Variable component of the ELN will be issued and traded as units on the NSE and will be detachable and transferable at the option of the Note-holder in accordance with the Conditions.
This will be the first ELN issued, in which the variable return can be traded separately on the NSE. James Mworia, the Group CEO, explained that the structure of the note issue is also a first in Kenya, in keeping with Centum’s theme to continuously innovate and helping to further deepen Kenya’s capital markets.
James Mworia added that “at the time of issuing the last bond in September 2012, Centum had total assets worth Kes 15.7 billion and since then, Centum had successfully doubled its total assets, which stood at Kes 36.8 billion as at 31 December 2014. A similar scenario was replicated in the growth of Centum’s cash flows from dividend, interest and exits from its portfolio.
Centum currently has a credit rating of A for both long and short term credit quality according to the Global Credit Ratings Company (GCR). This is above the minimum of BBB- for investment grade debt.
The note issue will open on the 18th of May and close on the 5th of June 2015. The Issue is arranged jointly by Dyer & Blair Investment Bank and Equity Investment Bank as the Lead Transaction Advisers. Coulson Harney are the Legal Advisors, PWC, the reporting accountants, K-Rep bank and Co-operative bank as the receiving banks, C&R as registrar and Fiscal Agent, and Ropat Trust Company as the Note trustee.
