A corporate Bond is a fixed income instruments issued by a company in order to raise capital. The corporate Bond Market in Kenya enables companies’ access long term capital at competitive rates enhancing their growth and development.
Requirements to List on the Green Bond Market in Kenya
|Incorporation Status||The issuer to be listed shall be a body corporate.|
|Share Capital and Net Assets of the Issuers||The issuer shall have minimum issued and fully paid up share capital of fifty million shillings and net assets of one hundred million shillings before the public offering or listing of the securities|
|Listing and transferability of securities||All fixed income securities offered to the public or a section thereof except for commercial papers shall be listed and shall be freely transferable and not subject to any restrictions on marketability or pre-emptive rights.|
|Availability and reliability of financial records|| The issuer must have audited financial statements complying with International Financial Reporting Standards (IFRS) for an accounting period ending on a date not more than four months prior to the proposed date of the offer.
The Issuer must have prepared financial statements for the latest accounting period on a going concern basis and the audit report must not contain any emphasis of matter or qualification in this regard.
|Profitable historic track record and future prospects||The issuer must have declared profits after tax attributable to shareholders in at least two of the last three financial periods preceding the application for the issue.|
|Debt ratios||Total indebtedness, including the new issue of fixed income securities shall not exceed four hundred per centum of the company’s net worth (or gearing ratio of 4:1) as at the latest balance sheet.|
Benefits of Corporate Bonds to Issuers and Investors
|Benefits for Investors||Benefits for Issuers|
|Corporate Bonds are less risky and less volatile compared to other asset classes.||Ability to raise long term capital at affordable rates to fund growth.|
|Wide array of bonds to enable investors build strong portfolios.||Faster way to raise capital compared to other forms of raising capital.|
|Corporate bonds are liquid offering investors easier exit and entry points.||Access to a wide array of investors.|
|Issuer||Issue Date||Term||Coupon||Maturity Date|
|Centum Investments Limited||16 December 2020||3 years||12 %||16 December 2023|
|Family Bank Limited||25th June 2021||5.5 years||13.75% pa||26 December 2026|
|East African Breweries Limited||29 October 2021||5years||12.25% pa payable semi annually||29 October 2026|
|Kenya Mortgage Refinance Company||4th March 2022||7years||12.50% pa payable semi annually||23rd Feb 2029|