Chase Bank Kenya has launched its Kes.10bn medium term multi currency note programme to strengthen its capital base and support its strategic initiatives.

Paul Njaga, Chase Bank CEO, said: “The issue will go a long way in maintaining the bank’s pace of growth. We are an ambitious bank that is keen on exceeding our stakeholder’s expectations and want investors to play a part in writing another chapter of our growth story.”

The proceeds from the issue will be used to strengthen the bank’s core capital, support lending to its key target segments SME’s, youth, women, and agri business.

It will also be used to finance expansion of the branch network, investment in IT and product development initiatives.

The Note will be issued in several tranches with the first tranche issued in Kenya Shillings.

The Bank intends to raise Kes.3Bbn from the 1st tranche with a Green Shoe Option of Kes.2Bn.

A Green Shoe Option is a clause contained in the bond underwriting agreement that allows the bank as the issuer to take up an additional Kes.2Bn if the initial Kes.3Bn is oversubscribed.

With a coupon of 13.1%, the issue is the highest yielding of several corporate bonds issued over the last two years.

Genghis Capital Investment Bank, an associate company of Chase Bank, is the lead transaction advisor and co placing agent while NIC Capital is the co-arranger and co-placing agent for the issue.

Samy Ghannam, Associate Director – Corporate Finance at Genghis Capital, said that the Note programme is being issued at a time of high investor interest and confidence in corporate bonds.

"Current yields are sustainable in light of the long-term domestic macroeconomic environment factors. In addition, by having a multi-currency programme the bank will also be in a position to leverage from the success of Kenya’s debut Eurobond which saw high subscription levels," he said.

The Bank expects the issue to be oversubscribed by a diverse investor segments in consideration of its attractive investment return, the bank’s historical financial performance and its ambitious strategic plans.

Total assets of the bank grew by 36% to Kes.119.5Bn in Q1 2015 compared to a similar period in 2014 while profit after tax rose 47% to Kes.634m over the same period.