NAIROBI – Commercial Bank of Africa (CBA) Group today listed its first medium term note on the Nairobi Securities Exchange as it seeks to accelerate its pan-African growth agenda. In the first tranche of the medium term note (MTN) issue, CBA raised Ksh7 billion, which was an oversubscription by 40%, but exercised the green shoe option of Ksh2 billion.
The bank’s plan was to raise Ksh8 billion over a two-year period beginning with Ksh5 billion as the first tranche in November 26, 2014, and the remainder by the end of June 2015. A medium-term note (MTN) is a debt note that usually matures in five to 10 years even though the term could be less than one year or as long as 100 years.
“Last year we embarked on a journey to this growth milestone with the launch of the Medium Term Note program in December 2014. The first tranche of the medium term note Program was very successful. This is an affirmation of the soundness of our strategy by the investment community. This capital injection is crucial to our regional expansion plans,” said CBA Group MD Isaac Awuondo during the bell ringing ceremony.
The MTN, listed on Fixed Income Market Segment, was necessitated by CBA’s strategy to expand regionally into new markets, which requires significant amounts of funds, over and above new capital injections by shareholders. “Our main aim for raising this capital was to facilitate our geographic expansion within the region. This vision is now a step away from being a reality,” said Mr Awuondo.
CBA’s key strategic objective is to acquire, maintain and grow market share, so as to become an integrated regional financial services provider and expand its presence in Kenya, Uganda and Tanzania. “The Mombasa-Nairobi standard gauge railway, whose construction has started, is set to open up greater business opportunities within the region” said Mr Desterio Oyatsi, CBA Board chairman.
“We look forward to the day when the Bank and indeed the Group will list their shares on the Nairobi Securities Exchange,” said NSE chairman Eddy Njoroge. “We urge firms in the banking and insurance sectors to follow the example and use the Capital Markets to enable them meet their regulatory obligations.”
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