DLA Piper, together with IKM Advocates (a member of DLA Piper Africa), has advised GuarantCo, a Private Infrastructure Development Group (PIDG) company, on the first Kenya Shilling corporate bond and first Kenyan green bond to be listed on the International Securities Market (ISM) of the London Stock Exchange. DLA Piper advised on all aspects of the listing of the Acorn Project (Two) Limited Liability Partnership’s medium term note programme (MTN), under which the bonds were issued, and which is valued up to KES5 billion.
The proceeds from the bonds are to be utilised for the construction of green-certified Purpose Built Student Accommodation (PBSA) for 5,000 students in Nairobi and aims to address the existing significant shortage of student accommodation. Acorn is one of the largest and most successful developers in Kenya and the first PBSA provider operating in the country. This transaction is expected to increase investors’ confidence in the Kenyan corporate bond market.
Both teams joined H.E President Uhuru Kenyatta of Kenya, the Rt Hon Alok Sharma, UK Secretary of State for International Development, GuarantCo and Edward Kirathe, CEO Acorn Holdings Ltd at the London Stock Exchange to open London’s markets for trading on 20 January 2020. Moody’s has rated the MTN programme B1, which is one notch higher than Kenya’s sovereign rating.
The Issuer’s global scale rating includes uplift for the credit enhancement provided by GuarantCo of around 2 notches, relative to Moody’s view of the Issuer’s standalone credit profile. This uplift reflects the rating of GuarantCo, the terms of the Notes and Guarantee, the size of the guarantee and how these factors improve the expected recovery values following an Issuer default.
The London team was led by Partner, Joywin Mathew, supported by Associate, Emma Jones. The listing of the MTN on the Nairobi Stock Exchange was led by the DLA Piper Africa, Kenya office (IKM Advocates) corporate partner, David Lekerai, supported by Associates John Mwangi and Meshack Mboya.