East Africa’s Biggest Lender KCB Eyes $250M International Bond Issue
Kenya Commercial Bank Ltd., East Africa’s biggest lender, is considering raising at least $250 million in a sale of international bonds next year, Chief Executive Officer Joshua Oigara said.
The lender, based in the capital, Nairobi, is in the process of obtaining a credit rating, which it expects to have by the fourth quarter, Oigara, 38, said in an interview yesterday at the U.S.-Africa Leaders Summit in Washington. The funds will help boost the bank’s mortgage portfolio, he said.
“We think that the international debt market is what we’d like to access in the next year,” Oigara said. “The amount will be decided when we’ve done our rating and our business plan for the next three to five years. But we won’t go for anything less than $250 million.”
KCB, as the lender is known, is Kenya’s largest by outlets and has the biggest presence in other countries. It is seeking to increase loans for homeowners in a nation of 43 million people and where there are only about 30,000 mortgages. Kenyan mortgage lending accounts for about 6 percent of bank loans, compared with about 25 percent in South Africa, Oigara said.
“One thing we need to do as a bank is to enable Africans to own homes,” he said. “It is a good enabler, a springboard for younger generations.”
Kenya’s government sold $2 billion of Eurobonds in June in the country’s debut offering. Other companies in Kenya, including ARM Cement Ltd., a Nairobi-based producer of the building material, and Kenya Power Ltd., the nation’s sole electricity distributor, have said they plan to follow the government’s lead by issuing Eurobonds of their own.
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