An offer for sale by KenGen for a 10 year Public Infrastructure Bond Offer Prospectus dated [date] (“KenGen-IM”) (capitalised terms used in this Guarantee . KenGen Limited () has released its prospectus For more information about KenGen Limited () and a full library of results, reports and. This Prospectus is issued in compliance with the Companies Act (Cap This document is a Prospectus comprising an offer for Subscription.
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It is the main generator of electric power in the country with prospetcus installed capacity of 1, Megawatts made up of hydropower, geothermal, thermal and wind.
This implies a significant demand growth potential and the government, through various agencies such as the Rural Electrification Authority, continues to drive efforts towards connectivity. The forecast projects an energy demand of 22, The peak demand is forecast to increase from 1, This is an indication prodpectus investments in power projects must be implemented in order to meet the demand.
Under the Vision National Development Planelectric power provision has been highlighted as a major pillar a key enabler in the realization of national development. The country must, therefore, generate more energy and increase efficiency in its consumption.
The economy currently services MW of emergency power to fill the supply gap.
PUBLIC INFRASTRUCTURE BOND OFFER – (PIBO)
This measure is expensive but necessary at this point in time. KenGen must therefore accelerate its investment programme to bridge the gap as well as meet the growing demand.
The company plans to increase its installed capacity by over MW by and over 2, MW by This expansion requires significant capital. The funds will be utilized in part-financing of the first horizon of the expansion programme. In the corporate world, companies raise money for operations or long-term projects in two ways, i. In issuing equity, the company essentially sells a portion of itself to the public in an IPO or to private investors in a Private Equity Placement.
The buyers are then known as shareholders and own a part of the company. In issuing debt, the company borrows from various sources. One way of issuing debt is through a bond.
The lenders are referred to as bondholders. In the event of liquidation or bankruptcy of a company, bond holders rank higher have higher claim on assets than shareholders do and are thus paid first. This is because bond holders are creditors. Shareholders are part owners of the company. With this ownership comes voting rights and the right to share in any future profits of the company. Ordinary shareholders are therefore the last to be paid. It is also worth noting here that as opposed to stocks, bonds have a defined pprospectus maturity after which the bond is redeemed.
Stocks may be outstanding indefinitely. Returns on bonds are generally lower than those on stocks but lrospectus a much safer investment. It therefore makes sense for any investor to have at least part of their portfolio invested in bonds. The participants in the debt market are usually: A bond is a debt instrument. In even simpler terms, a bond is a loan in which the terms, pay-back date and interest rates are detailed in a legal document.
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and is obliged to pay interest coupon and repay the principal at a later date. It is a formal contract to repay borrowed money with interest at fixed intervals. The primary market is where the bonds are issued and sold for the first proospectus such as in a PBO.
The secondary market is where bonds are later traded i.
Nearly all bonds pay interest. The rate coupon rate will vary depending on a number of factors such as current market interest rates, term to maturity, creditworthiness of the issuer, etc but these rates usually tend to have a relationship to risk. The more likely it is that a bond issuer will default on a loan, the higher the interest rate he must pay to attract investors.
These payments are usually made twice a year. Bonds with maturities of up to prospecctus years are referred to as short term bonds. Those with maturities of between 5 and 12 years are referred to as medium term bonds and those with maturities of more than 12 years are long-term bonds. Bonds may be secured or unsecured. A secured bond is backed by collateral, meaning it has the money or physical assets that a bond issuer must give to investors if the bond defaults.
Securing ensures that prosprctus will be available to pay the principal on the bond.
Instead, the issuer promises that the lenders kenyen be repaid. Unsecured bonds could be issued in this manner either because the company does not have enough assets to collateralize or the company is well established and is therefore trusted to repay its debts. Unsecured bonds naturally carry more risk than secured bonds and therefore pay higher yields.
A bond prrospectus interest rate stays the same over its lifespan is referred to as a fixed interest bond. The changes in rates usually reflect economic conditions.
A floating rate is usually pegged to another economic indicator prkspectus as Treasury bill rates or even inflation and is determined using a prescribed formula. On the Nairobi Stock Exchange, there are currently 68 government bonds issued by the Government of Kenya and 10 corporate bonds issued by 7 companies.
Of the corporate bonds, there is none whose issued value is more than Kshs.
KenGen Limited () Prospectus – AfricanFinancials
The combined value of all listed government bonds is approximately Kshs. Prsopectus maturities of the government bonds range between one and twenty years while those of the corporate bonds range between two and eight years. The floating rate coupons are pegged to the day Treasury Bill average rate. No fee is charged for CDS account opening. CBK, however, reserves the right to amend the requirements and call upon investors to comply with any changes deemed appropriate.
Treasury Bonds, however, are paperless securities i. For an institution, the interest earned on bonds is further subject to corporate tax as it falls under interest income. Skip to main content. KenGen must therefore accelerate its investment programme to bridge the gap as well as meet the growing demand The company plans to increase its installed capacity by over MW by and over 2, MW by Bonds and debt market. Introduction In the corporate world, companies raise money pospectus operations or long-term projects in two ways, i.
Definition A bond is a debt instrument. Bonds are also referred to as fixed income securities. Secured vs Unsecured Bonds Bonds may be secured or unsecured. Fixed Rate vs Floating Rate Bonds A bond whose interest rate stays the same over its lifespan is referred to as a fixed interest bond. The corporate bonds are either fixed or floating.