Chase Bank launches Sh10 billion bond to finance expansion

NAIROBI: Chase Bank has launched a Sh10 billion multi-currency corporate bond. The medium term bond will enable the bank to raise additional capital to strengthen its capital base and finance expansion.

The Note Programme will be issued in several tranches with a seven-year tenure. The bank intends to raise Sh3 billion in the first tranch with a green shoe option of Sh2 billion. This means the bank as as issuer is allowed to take up an additional Sh 2billion if the initial Sh3 billion is oversubscribed.

Chase Bank Chief Executive Paul Njaga said with a coupon of 13.1 per cent, the issue is the highest-yielding of several corporate bonds issued over the last two years, adding that it will go a long way in maintaining the bank's pace of growth.

"More and more we see customers looking for long-term funding, so that calls for change in strategy to be able to deliver. A medium-term Note with a tenure of seven years presents a good product for us. We will use the proceeds to lend to customers for the longer term," he said at the launch in Nairobi.

The bank expects the issue to be received well given its financial performance. The additional capital is expected to strengthen the bank's capital base and support lending to its key target segments of SMEs, youth, women and agribusiness.