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CAPITAL MARKETS

Kenya: Two issues set to triple bond market’s size

Market poised for record-sized issues; Corporates see debt as more attractive than equity

Kenya is starting the autumn with two corporate bonds that are both more than twice as big as any previously issued in the country. The new bonds will more than triple the amount of outstanding Kenyan corporate bonds.

year maturity of Kengen’s KS15bln bond

Kengen, the country’s dominant electricity generator, received approval in late August to sell a 10-year bond for KS15 billion ($197 million) with a coupon of 12.5%. If this is oversubscribed it can raise an additional KS10 billion. The lead arranger is Standard Chartered and Standard Investment Bank is lead sponsoring broker. Kenya’s biggest mobile-phone company, Safaricom, is also preparing a bond to be launched this month, aiming to raise KS12 billion. The arrangers are CFC Stanbic, the Kenyan subsidiary of South Africa’s Standard Bank, and Barclays Capital, in conjunction with Absa Capital of South Africa. The proceeds of the bond will be used to upgrade the mobile phone network and build broadband provision (Kenya received broadband this summer).

Minimum denominations of the Kengen bond will be sufficiently small to be marketed to retail investors but Safaricom is only targeting institutional investors.

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