Listed telecoms firm Safaricom has closed its Sh5 billion bond offer to the Kenyan market, with a 50 per cent over-subscription as over Sh7.5 billion worth of applications were received, against the Sh5 billion that has been put on offer, an amount that represents the first tranche of a Sh12 billion bond programme the company has put together. The bond offer, part of an extensive capital-raising initiative the company is implementing, closed on Thursday while allocations were completed on Friday the 30th October. The notes had been divided into two options: one with a fixed rate and the other with a floating rate. Most of the applications and allocations were for the fixed component. The fixed rate notes carry a coupon rate of 12.25 per cent per year, while the floating rate notes’ pricing will be pegged at 185 basis points above the most recent published rate for the 182-day Treasury Bill. 

“We are delighted by the uptake of this bond and the excitement it has generated in the market. This represents a validation of our strategic direction by the market. Safaricom will be using the funding for general corporate capital purposes, including the rollout of some critical projects,” said Safaricom CEO Michael Joseph. The issue was put together by CFC Stanbic Bank and CFC Stanbic Financial Services; Barclays Bank of Kenya Limited and Barclays Financial Services Limited in association with Absa Capital, a division of Absa Bank Limited, as arrangers. The joint sponsoring stockbrokers were CFC Stanbic Financial Services and Kestrel Capital (East Africa) Limited.  The reporting accountants on the issue is PricewaterhouseCoopers, while the transaction’s legal counsel is Kaplan & Stratton. Legal counsel to Safaricom on the program is being provided by Daly & Figgis, the fiscal and calculation agent is CFC Stanbic Bank, while the registrar is Livingstone Registrars. With the issue of the Sh5 billion medium term note programme, Safaricom has entrenched a long-standing relationship with the Kenyan corporate bond market. In 2001, the listed telecoms operator launched a bond for Sh4 billion, the principal for which was repaid between September 2003 and March 2006.