THE FIRST KENYA SHILLING CORPORATE BOND, ARRANGED AND PLACED BY STANBIC BANK KENYA LIMITED AND SBG SECURITIES LIMITED

20 Jan 2020

Nairobi, January 20, 2020: Acorn Holdings (Acorn), the largest purpose-built student accommodation property developer in Kenya, has cross-listed its KES 4.3 billion green bond programme, on the International Securities Market (ISM) of the London Stock Exchange. Stanbic Bank Kenya Limited and SBG Securities Limited acted as sole Arrangers and Lead Placing Agents for the Issuance. 

David Schwimmer, CEO of the London Stock Exchange Group welcomed H.E. President Uhuru Kenyatta and the Rt Hon Alok Sharma, UK Secretary of State for International Development to open trading today.The bond programme first listed at the Nairobi Securities Exchange on 13th January 2020. 

Early this month, GFC Media Group’s Bonds, Loans & Sukuk Africa Awards recognized Stanbic Bank Kenya Limited, innovative and ground-breaking deal in 2019 for their involvement in closing Kenya’s first ever Green Bond by Acorn Project (Two) Limited Liability Partnership. 

Stanbic Bank Kenya Chief Executive Charles Mudiwa said the bond is a significant step in the development of green finance for East Africa, it is a testament to the bank’s revamped commitment to provision of housing which is one of the key development priorities of the Kenya government. Kenyas Green Economy Strategy is geared towards enabling Kenya to attain a higher economic growth, which firmly embeds the principles of sustainable development in the overall national growth strategy.“The closing and listing of Kenya’s first ever Green Bond by Acorn Project (Two) Limited Liability Partnership, contributes to Kenyas commitment to achieve a minimum 20 percent reduction in water energy and material efficiency through green buildings. Investing in environmentally friendly housing for over 5,000 students in Nairobi, is a milestone in Kenya’s transition to a low-carbon economy .”

 

This pioneering yet innovative capital raise will also see a major shift in the Real Estate sector in the region. The Acorn bond will be the first project bond in the Real Estate sector, introducing depth in the real estate offtake market yet providing a secure platform for real estate investors. 

Stanbic Bank Kenya’s Head of Investment Banking, Jonathan Muga said, “Sustainable finance is increasingly becoming a key focus of domestic financial institutions in Kenya. Stanbic Bank Kenya Limited and SBG Securities Limited’s strategic roles as Lead Arranger and Placing Agent of the first ever green bond in the country is a proud moment for domestic financing institutions. We were very excited to have this successful role of advising, arranging, structuring, coordinating and distributing the bonds into the market.”

This was a transaction of many firsts: the first Green Bond to be issued in East Africa, first bond in Kenya to be approved as a Restricted Public Offer by the CMA, the first senior secured bond in Kenya and the first corporate bond to be rated by Moody’s in East Africa. This is also the first corporate bond to be cross-listed on the Nairobi Securities Exchange and the London Stock Exchange. In addition, there was a credit enhancement via a 50% guarantee on principal and interest from GuarantCo. The bond also had ‘Project bond/Loan type’ features with upfront commitments and deferred drawdowns.” 

For Stanbic Bank, sustainability is multi-dimensional and is part of the operations. It is about mitigating risks, building resilience, creating opportunities and transforming lives. It is the long-term goal of sustainable development which encompasses meeting the needs of the present without comprising the ability of future generations from meeting their needs. As a major player in one of the fastest growing regions in Africa, Stanbic Bank will continue to pioneer innovative capital raise that will attract a wide range of investors seeking to positively impact the environment and see major shifts in the various sectors in the region. 

UK Secretary of State for International Development, Alok Sharma, said: “The listing of the first ever Kenyan green bond on the London Stock Exchange is a landmark moment in the partnership between the UK and Kenya. With the support of UK aid, the Acorn Holdings’ bond will support Kenya to create climate resilient, sustainable student housing. The City of London is a vital player in cementing the UK’s role as the investor of choice for African nations, a position showcased at today’s UK Africa Investment Summit.” 

CEO, London Stock Exchange Plc and Director of International Development, LSEG, Nikhil Rathi, said: “We congratulate Acorn and GuarantCo on the issuance of a landmark green bond, the first ever by a Kenyan issuer and the first issued in Kenyan shillings. More than 100 African bonds are currently listed on London Stock Exchange, raising close to $105 billion. This highlights London’s ability to be a strong partner for the development of African capital market and in the transition to a sustainable, low-carbon economy.” 

CEO of Acorn Holdings, Edward Kirathe, said: “It is a great honour for us to have successfully issued the first green bond in Kenya last week and now at the London Stock Exchange. Having pioneered purpose-built student accommodation in Kenya three years ago, we are proud to be pioneering yet another milestone for the country. We are grateful to DFID, GuarantCo and FSD Africa for the unwavering support we received without which it would not have been possible to issue and list this bond. The bond will enable Acorn to deliver an additional 5,000 beds to address the severe shortage of decent, safe and secure student accommodation in Nairobi.” 

CEO of GuarantCo, Lasitha Perera, said: “The listing today represents a major milestone for Acorn and GuarantCo. Supporting the development of local capital markets is a priority for PIDG companies, and capital markets in Kenya have a crucial role to play in the development of the country’s infrastructure sector that is critical to its economic development and future prosperity. We hope that through this precedent and framework, the listing will encourage other corporates so that investors can benefit and stimulate the growth of local capital markets in Africa.”

 


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