CfC Stanbic cash call gets high returns

CfC Stanbic Bank’s Sh4 billion corporate bond has been oversubscribed by 27 per cent yet again underlining investors huge appetite in the financial instrument.

It becomes the latest in as many corporate bonds to be oversubscribed including that of NIC Bank, Britam, UAP and CIC Insurance Company.

The cash raised will go towards financing the lender’s expansion drive.

This was CfCs first tranche of the lender’s Sh5 billion multi-currency medium term note programme which also allows for the issue of credit-linked notes.

Chief executive Greg Brackenridge said the high demand demonstrates a robust investor appetite for bonds and the strong faith investors have in the bank.

CfC is currently incorporating a subsidiary in South Sudan where it has been operating a branch. Mr Brackenridge said proceeds shall go towards funding expansions.

“The proceeds of the issue will be used to expand our branch network and enhance our digital platforms and solutions,” he said.

The 7-year bond was majority taken up by fund managers who accounted for 88 per cent with insurance companies and retail investors getting 9 and 3 per cent respectively. It raised Sh5.08 billion out of the anticipated Sh4 billion.

The bond is priced at a fixed coupon rate of 12.95 per cent and qualifies as Tier II capital, which is aimed at further strengthening the bank’s already adequate total capital position.