The Public Investment Committee on Social Services, Administration, and Agriculture (PIC-SSAA), chaired by Hon. Emmanuel Wangwe, on Wednesday, April 3, 2024 met with East African Breweries Ltd, Managing Director (MD), Ms. Jane Karuku, to discuss National Social Security Fund’s (NSSF) investment in EABL.  

The Committee learned that NSSF invested Kshs. 469,300,000 in EABL with a corporate bond issued in April 2017 showing an excessive maturity rate of 14.17 percent as of March 2022.

Hon. Wangwe sought to know whether NSSF's acknowledged acceptance of early redemption.

In response, Ms. Karuku explained that early redemption was allowed as per the terms and conditions.

Questions also arose about the interests the investor could receive if the notes were left to maturity, with discussions on the agreement's terms regarding expected numbers after maturity.

"On March 13th, 2017, EABL offered lots at a fixed rate coupon of 14.17 percent, achieving full subscription by March 24th, 2017. The 2017 lots were allotted on March 27th, 2017, and successfully assured on April 3rd, 2017," said Ms. Karuku.

 EABL decided to redeem the 2017 lots on June 28th, 2021, nine months before their scheduled maturity date, in compliance with the stipulated law.

Ms, Karuku added that in Kenya, besides issuing a public corporate bond, it is required by law to appoint arrangers, placing agents, registrars, and fiscal agents.

“Stanbic Bank Limited and Absa Bank Kenya Limited jointly played the roles of arrangers and placing agents, while Stanbic Bank Limited served as registrars and fiscal agents. The pricing supplement for the 2017 lots was approved by the CMA and submitted to the NSE,” she said