Consolidated Bank is KES 2.32 billion shy of its KES 4billion target. After recently concluding the first phase of its bond issue, in which it auctioned almost half of its projected stock, the bank managed to raise KES 1.68 billion in the cash call with a subscription rate of 84%.
The investment, which will run for 7 years, has also been competing with 91 day and 182 day treasury bills which respectively yielded highs of 13.44% and 13.28% during their last sale.
In light of these challenges, Consolidated Bank MD, Ndegwa Wachira has expressed confidence in the company’s performance. He said that the company had received a positive response from its investors.
The auction called for investors to choose between fixed and floating coupons. Shareholders who chose fixed coupons are entitled to an interest rate of KES 13.25. Those who opted for a floating tariff will be permitted to earn a maximum interest rate of KES 13.75 which will subject to changes based on the country’s economic environment.
Earnings from the bond sale will be used to increase the company’s revenue and give them the financial backbone to lend money to their clients. The bank intends to raise the remaining cash during the second phase of the bond issue.