The first tranche of the Sh5 billion bond will offer a coupon rate of 13.65 per cent for the three- and five-year fixed rate notes. PHOTO | FILE
Investors taking up the floating-rate note option of Real People’s Sh2.5 billion bond will earn nearly 15 per cent, one of the highest offered this year.
Real People Kenya will pay a coupon rate pegged at 275 basis points above the prevailing 182-day Treasury bill yield for the five-year floating rate note.
The first tranche of the Sh5 billion bond will offer a coupon rate of 13.65 per cent for the three- and five-year fixed rate notes.
The latest 182-day T-bill auction was priced at 12.15 per cent, meaning at current rates Real People would pay 14.8 per cent for the floating rate note. Only Home Afrika’s 17 per cent rate for its 2014 bond is higher in the market.
“We have experienced exponential growth in our loan book over the past three to four years thus the need to source for funds to sustain this growth momentum in the long term,” said Real People CEO for East Africa Daniel Ohonde.
There is likely to be upward pressure on the T-bill rates in coming months as investors factor in the weaker shilling amid tightening monetary stance by the Central Bank.
Real People is to raising cash for onward lending to SMEs. Its South African parent company recently received a negative rating from GCR, based on a low quality loan book and funding risks associated with a lack of investor appetite.
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