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EADB to issue Sh10.6bn bond across East Africa

February 23, 2014


Regional financier the East African Development Bank (EADB) plans to issue the first tranche of its Sh10.6 billion ($125 million) corporate bond before end of the year.

The lender intends to raise Sh2 billion in the first tranche of its multi-currency bond to be issued in Kenya, Uganda, Tanzania, Rwanda and Burundi.

Burundi is not a shareholder of the bank, but the bank said that discussions on its inclusion were ongoing.

"The first tranche of Sh2 billion will be done this year. The money will be used to finance projects in agriculture, infrastructure and energy," said EADB director-general Vivienne Yeda.

The regional financier had planned to issue the bond last year, but shelved the plans due to high interest rates.

The four member countries own 90 per cent of EADB, with other shareholders including African Development Bank, Netherlands based fund FMO and Commercial Bank of Africa.

EADB has a loan book of $90 million issued to businesses across the member states, with an estimated $25 million in Kenya. Last week, the lender advanced Sh620 million loan to Housing Finance for a 220 units housing project in Kahawa in Nairobi.

In June last year, EADB was assigned a first-time rating of Ba1 by Moody's on long-term foreign currency debt with a stable outlook.

This will be the second time the regional lender will be issuing a bond in Kenya after issuing a seven-year paper in 2004.

The lender joins a list of other institutions that plan to raise debt through the fixed income securities this year. Housing Finance has received approval to issue a Sh20 billion.

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Source: Business Daily (Kenya)

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