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.

Following review of the lender’s information memorandum, the Authority is satisfied that Centum Re Limited makes adequate disclosure of material information in accordance with the requirements of the Capital Markets Act, the Second Schedule and Part C of the Third Schedule to the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002, to enable investors make an informed decision on the offer.

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.

ENDS

BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.