The Capital Markets Authority (CMA) has approved the first green bond to be issued by property developer Acorn Group and PE fund Helios to raise Sh5 billion for construction of student hostels.
The fixed rate unlisted bond is being issued as a private placement, meaning it is being marketed to a select number of investors only, hence its tenor and coupon were not disclosed in the CMA notice issued Thursday.
Acorn and Helios target to build up to 3,800 university hostel units in Nairobi at a cost of about Sh7.4billion.
They have already put up more than 1,000 units in Ruaraka, Jogoo Road and Parklands under the Qwetu brand.
“The green bond seeks to raise Sh5 billion to finance sustainable and climate-resilient student accommodation and is structured as a restricted public offer for sophisticated investors,” said CMA in the notice.
“‘The issuance is a critical step in advancing the development of an effective ecosystem to support the establishment of green capital markets in Kenya.”
The bonds investors are also getting a partial guarantee from GuarantCo, which will see them recover up to 50 percent of their principal and interest in case of a default.
The guarantee has led to the Acorn bond getting a risk rating of B1 Stable from global ratings agency Moody’s, one rung higher than Kenya’s sovereign rating of B2 stable.