CfC Stanbic Bank bond oversubscribed as investors snap up latest issue

NAIROBI, KENYA:  CfC Stanbic Bank’s Ksh4 billion subordinated and unsecured Tier II fixed rate bond, was oversubscribed by 27 per cent. This was the first tranche of the Bank’s Sh5 billion multi-currency medium term note programme which also allows for the issue of credit-linked notes. 

The 7-year bond jointly arranged by the CfC Stanbic Bank and SBG Securities, raised Sh5.08 billion with fund managers taking 88 per cent of the notes. Insurance companies and retail investors received 9 per cent and 3 per cent respectively.  

CfC Stanbic Bank Chief Executive Greg Brackenridge hailed the success of the bond, which he said demonstrates a robust investor appetite for bonds and the strong faith investors have in the bank. 

Mr. Brackenridge noted that the bank continues to make gains in providing longer term loans to both personal and business customers, adding that the bond will better match the average tenor of the bank’s funding with the average tenor of customer loans and advances.  

The bond, priced at a fixed coupon rate of 12.95 per cent, also qualifies as Tier II capital further strengthening the bank’s already sound total capital position. Interest will be paid semi-annually in June and December each year starting in June 2015. 

With three previous bonds, the financier is one of the more prolific corporate debt issuers on the Kenyan market, with this being the Bank’s largest ever single bond issue to date. 

CfC Stanbic Bank is 100 per cent owned by CfC Stanbic Holdings Limited (“CSH”). CSH is in turn majority owned (60 per cent) by Stanbic Africa Holdings Limited which is a subsidiary of the Standard Bank Group, the largest bank in Africa in terms of assets. CfC Stanbic is the sixth largest bank in Kenya in terms of assets as at September 2014.