The Capital Markets Authority has given the approval for Centum Real Estate to issue a KSh 4 Billion bond to finance ongoing housing projects in Kenya. Centum Re, a subsidiary of Centum Investment, will issue the 3 year bond as zero coupon medium-term notes and zero coupon equity-linked medium-term notes paying 12% and 12.5% interest respectively. The bond will have a green shoe option of taking up to KSh2 billion more if the bond is oversubscribed.
Centum’s real estate bond will only be available to sophisticated investors who are sufficiently versed with the risks associated with the notes.
In a statement to the press, Centum Real Estate Managing Director, Samuel Kariuki said, “The bond offers an opportunity for investors to get a piece of Kenya’s real estate pie without taking the risk of getting involved in actual development of the projects.”
“The company has a dedicated team with a blend of experience and track record in project planning and development, executing conceptualized developments and delivering on return objectives,” Centum Real Estate Managing Director added.
The Centum bond is secured by the projects and therefore investors’ funds are secure. According to the firm’s prospectus, Centum Real Estate has been assigned a short-term credit rating of A2 and a long-term rating of BBB+ from Global Credit Rating Company Limited, meaning that it has low credit risk and adequate capacity to meet its financial obligations.
