Family Bank gets nod to raise Sh10b from market

Family Bank Chairman Wilfred Kiboro (right) and the bank’s CEO Peter Munyiri after the launch of a rights issue in 2014. [Photo: File/Standard]

The capital markets regulator has allowed Family Bank to raise Sh10 billion through a multi-currency medium-term note.

The bank said Wednesday that it had received the formal regulatory approval from the Capital Markets Authority (CMA) to raise up to Sh10 billion through a Senior Unsecured or Subordinated Multi-currency Medium Term Note (MTN) programme. An MTN is a corporate bond offered continuously by a company to investors through a dealer, and it can take up to 30 years to mature.

The bank says the transaction will be by way of public offer of debt securities by the bank.

“The approval paves the way for the bank to raise additional capital to support its strategic growth initiatives. The Notes will be issued in tranches with the first tranche expected to be launched at the end of this month or October 1, 2015,” the bank said in a statement Wednesday.

Financing plans

Family Bank, which was ranked 16 out of 45 Kenyan lenders at the end of last year in terms of assets, said it will use the funds to boost its core capital and invest in new information technology systems.

The bank’s Chief Executive Officer, Peter Munyiri said the bank has structured the funding in such a way that it can continuously raise funding for the next five years for its strategic initiatives.

Munyiri said the bank will use the proceeds to strengthen its core capital, improve the bank’s overall IT infrastructure so as to propel its domestic and regional expansion plans as well as for on lending activities.

The bank has been on an expansion drive– and has opened seven new branches recently including a branch in Migori, Chuka, Utawala, Thika Makongeni, Ruaka, Gateway Mall and Bamburi in Mombasa. Another five more outlets will be rolled out by year end.

Faida Investment Bank and NIC Capital Limited are the appointed joint lead transaction advisers and placing agents for the offer. Mboya Wangong’u and Waiyaki Advocates are the legal advisers to the Issue while Deloitte are the reporting accountants and BSD Group are the Marketing and PR consultants for this issue.

The multi-currency bond programme gives the bank the flexibility to raise funds locally as well as to tap into hard currency market through reverse inquiries.