On November 19, 2018, Britam Holdings moved to clear its corporate bond well before the July 15, 2019 maturity date, paying bondholders a total of Sh6.25 billion.
The payout covered the Sh6 billion principal plus Sh255 million in accrued interest, which had built up since the last interest payment date of July 16, 2018. The insurer said the redemption was made to investors on record as of October 4, 2018.
Equity Bank and Commercial Bank of Africa were among the lenders that benefited from the buyback. Equity was the largest holder, with bonds worth Sh1.2 billion. Commercial Bank of Africa held Sh410.4 million, while Family Bank held the same amount and Chase Bank had Sh164.1 million.
High-net-worth individuals also took part in the issue, putting in Sh348.6 million. The bond carried a fixed annual interest rate of 13 per cent.
Britam said the early redemption became possible after it received a Sh5.7 billion equity injection from private equity fund AfricInvest, which took a 14.3 per cent stake in the insurer.
The company’s borrowings stood at Sh8.5 billion in June, and the retirement of the bond was expected to reduce that burden sharply. Britam was also projected to save about Sh780 million a year in interest expenses it had been paying to bondholders.
