CMA approves Kshs4 billion Centum Medium-Term Note
Nairobi, 3 December 2020…The Capital Markets Authority (CMA) has granted approval to Centum Real Estate Limited (Centum Re) to issue secured zero-coupon and secured zero-coupon equity-linked Medium-Term Notes of Kshs4 billion, with a green shoe option of Kshs2 billion. The offer, a restricted issue, targets sophisticated investors who are sufficiently versed with the risks associated with the notes, in line with Section 30(b) of the Capital Markets Act.
The notes have a tenor of three years. Proceeds from the issue will be used to fund real estate development by Centum Re, a subsidiary of Centum Investment Company Limited. The senior secured zero-coupon notes will attract an indicative interest rate of 12.5 percent whereas the senior secured zero-coupon equity-linked notes will generate an indicative interest rate of 12 percent. The senior secured zero-coupon equity-linked notes comprise an additional 200 basis points over and above the interest rate, subject to the Issuer meeting a minimum project internal rate of return of 20% on at least two of the projects financed by the Notes.
The issuer has been assigned a short-term credit rating of A2 and a long-term rating of BBB+ from Global Credit Rating Company Limited, according to a statement on its short form prospectus.
BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY