EABL to pay Sh6b debt earlier

The East African Breweries Ltd (EABL) has set June 28 as the date for early redemption of medium-term notes dated March 3, 2015.

In a notice on Monday, the brewer said it will pay the outstanding Sh6 billion corporate bond that it issued six years ago by end of next month.  

“The early redemption will be effected on June 28, 2021. The total outstanding principal amount of the notes is Sh6 billion,” said Kathryne Maundu, East African Breweries Company Secretary.

EABL issued a two-tranche medium-term note amounting to Sh11 billion to boost its capital base and improve its operations.

“The notes will be redeemed at an amount equal to the nominal value of the notes, together with accrued but unpaid interest from the preceding interest payment date, up to and including the early redemption date,” she said.

“On the early redemption date, the early redemption amount will be disbursed to holders registered as owners of the notes in the Central Depository and Settlement register as at June 14, 2021.”

According to Capital Markets Authority data, as at December 31, 2020, the total outstanding amount of corporate bond issues was Sh19.13 billion, representing a 5.11 per cent increase from Sh18.2 billion reported in the previous period. This increase was due to the issuance of a bond by Centum Investment’s subsidiary Centum Real Estate Limited to raise Sh4 Billion with a Green Shoe Option of Sh2 billion.

The proceeds raised from the bond will be used to finance the different housing projects that the company is engaging in. 

In the secondary bond market, the quarter one 2021 bond market turnover increased by 17.80 per cent with Sh199.38 billion worth of bonds traded compared to Sh169.26 billion traded in the fourth quarter of 2020.

A further comparison of first quarter of this year bond turnover with similar period last year indicates a 26.21 per cent increase from Sh157.98 billion recorded in first quarter 2020 to Sh199.38 billion recorded in the first quarter of 2021.