This archive report was first published on 23 August 2019.
Kenyan lender NIC Bank is preparing to pay out Ksh5 billion to bondholders as a medium-term note issued in 2014 matures early September.
The bond, listed on the Nairobi Securities Exchange (NSE), will come to term on September 9, with the bank stipulating that the tranche's payout will be at a 12.5% per annum fixed interest rate.
According to a letter to the NSE, NIC Bank will pay the final interest payment and principal redemption on Monday, September 9.
Eligible noteholders will be those whose names appear on the Register of Bondholders as of August 30, the lender said.
The notes have attracted a gross interest of Ksh358 million, with an outstanding amount of Ksh5.5 billion.
Notably, NIC Bank is in the process of merging with Commercial Bank of Africa (CBA) to form one of the biggest lenders in the Kenya banking sector.
Already, the merger has received regulatory approval, including being exempt from tax in the share transfer deal.
As part of the merger, staff from both Tier 1 Bank (CBA) and Tier 2 lender (NIC) are required to be retained for at least one year, as per the Competition Authority of Kenya's (CAK) approval in May.
The merged bank will count among its top owners some of Kenya's renowned billionaire investors and political figures, including the Kenyatta family, the Phillip Ndegwa family, and businessman Naushad Merali.
