I&M to repay Sh3.6bn bond on March 19

I&M Holdings is set to repay its Sh3.6 billion corporate bond within three months. FILE PHOTO | NMG 

In Summary

• Corporate bonds, once used widely by companies to raise funds for expansion, have fallen out of favour following defaults running into billions of shillings.

By VICTOR JUMA
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Banking group I&M Holdings is set to repay its Sh3.6 billion corporate bond within three months — a move that will further reduce corporate debt securities listed on the Nairobi Securities Exchange (NSE).

Corporate bonds, once used widely by companies to raise funds for expansion, have fallen out of favour following defaults running into billions of shillings by issuers such as Chase and Imperial banks.

In December 2013, I&M raised Sh3.4 billion through a bond earning a fixed interest rate of 12.8 per cent per annum and Sh226 million through another bond earning a floating rate set at the yield of 182-day T-Bill plus a premium of two per cent.

Both bonds are unsecured and have a five-year tenor ending on March 19, 2019.

The last corporate bond was a Sh6 billion paper issued by East African Breweries (EABL) in April 2017 and there have been more redemptions of the fixed income securities than new offerings.

Insurance group Britam Holdings, for instance, in November redeemed its Sh6 billion bond nine months ahead of its expected maturity date of July 15, 2019.

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