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8/8/2019 Bond Issuance
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PROCESS OF BONDPROCESS OF BOND
ISSUANCEISSUANCE
PRESENTATION BYPRESENTATION BY
MOHAMED HASSANMOHAMED HASSAN
EXECUTIVE DIRECTOREXECUTIVE DIRECTORDYER AND BLAIR INVESTMENT BANK LIMITEDDYER AND BLAIR INVESTMENT BANK LIMITED
8/8/2019 Bond Issuance
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PREPRE--ISSUE PREPARATIONISSUE PREPARATION
Consult your Investment BankerConsult your Investment Banker
Business plan discussionsBusiness plan discussions
Financing requiredFinancing required
Capital structure decisionsCapital structure decisions
Debt optionDebt option
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PREPARATION OF WORKPLANPREPARATION OF WORKPLAN
AND TIMETABLE OF ISSUEAND TIMETABLE OF ISSUEBOND ISSUE TIMETABLE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Mandate LetterFinalise Mandate Letter
Information MemorandumFinalise Draft I.M.for submission to CMA and NSE
Address any regulatory comments
Legal Documentation
Legal Due Diligence, Documentation/ Legal opinion
drafting for inclusion in I.M. (including conversion to
public company & finalisation of security documents)Finalise Agency Agreements
Financial
Financial Due Diligence, Draft Report for inclusion in IM
Regulatory ApprovalObtain approval for the Issue from CMA and NSE
Obtain approval from Govt
Marketing and Book BuildingInitial Market-read on key investors; continued dialogue
Appoint sponsoring stockbroker
Prepare research note and indicative terms
Evaluation of market read; prepare term sheet
Fedback on indicative term sheet
Continued dialogue with investors pending I.M. approval
Distribute Investor Pack; Road Shows
Book Building
Price BondsSigning; Settlement
Receipt of bond proceeds
Listing
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APPOINTMENT OFAPPOINTMENT OF
PROFESSIONALSPROFESSIONALS
ArrangersArrangers Investment BanksInvestment Banks Sponsoring Stock BrokersSponsoring Stock Brokers
Reporting AccountantsReporting Accountants Legal counselLegal counsel
Fiscal Agent and RegistrarFiscal Agent and Registrar Note trustees in case of guaranteeNote trustees in case of guarantee
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PREPARATION OF INFORMATIONPREPARATION OF INFORMATION
MEMORANDUMMEMORANDUM
Adhere to legal requirements of Capital Markets Authority ActAdhere to legal requirements of Capital Markets Authority Act
Adhere NSE Rules and RegulationsAdhere NSE Rules and Regulations Opinion by Reporting AccountantOpinion by Reporting Accountant
Certification the projection by the Reporting AccountantCertification the projection by the Reporting Accountant
Legal opinion on authenticity of all documentationsLegal opinion on authenticity of all documentations
Legal opinion on the Information MemorandumLegal opinion on the Information Memorandum Summary of the Bond issueSummary of the Bond issue
Use of ProceedsUse of Proceeds
Key investment considerationsKey investment considerations
Financial rating or healthFinancial rating or health
Industry analysisIndustry analysis
Issues of Corporate GovernanceIssues of Corporate Governance
Experience and qualification of Board of Directors and ManagemenExperience and qualification of Board of Directors and Managementt
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MARKETING AND BOOK BUILDINGMARKETING AND BOOK BUILDING
Timing the MarketTiming the Market
Preparation of research note and indicative term sheetPreparation of research note and indicative term sheet
Initial market read on key investorInitial market read on key investor -- To gauge their appropriate appetite and structure forTo gauge their appropriate appetite and structure for
the bondthe bond
Feedback on indicative termFeedback on indicative term Evaluation of market read and preparation of final term sheetEvaluation of market read and preparation of final term sheet
One on One Investor visits to build commitmentsOne on One Investor visits to build commitments
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Address any
regulatory comments
Finalise Draft I.M.for
submission to CMA
and NSE
Information
Memorandum
Financial Due
Diligence, Draft Report
for inclusion in IM
Financial
Obtain approval
from Govt
Obtain approval for
the Issue from CMA
and NSE
Regulatory
Approval
Finalise Mandate
Letter
Mandate Letter
Listing
Signing; Settlement
Price Bonds
Book Building
Distribute Investor Pack; Road Shows
Continued dialogue with investors pending I.M.
approval
Feedback on indicative term sheet
Evaluation of market read; prepare term sheet
Prepare research note and indicative terms
Initial Market-read on key investors; continued
dialogue
Marketing and Book Building
Finalise Agency Agreements
Legal Due Diligence, Documentation/
Legal opinion drafting for inclusion in I.M.
(including conversion to public company
& finalisation of security documents)
Legal Documentation
++
+ +
Review
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AFTER APPROVAL?AFTER APPROVAL?
10 days of offer period10 days of offer period Formal investor group presentationFormal investor group presentation
One on one road show to get commitmentsOne on one road show to get commitments Closure of offerClosure of offer
Announcement of allocationAnnouncement of allocation Settlement on the value dateSettlement on the value date
ListingListing
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Corporate Bond MarketCorporate Bond Market
UnsecuredUnsecuredTB+1.75%TB+1.75%20102010ARM (800m)ARM (800m)
75% enhanced75% enhancedTB+1.25%TB+1.25%20092009CeltelCeltel (4.5b)(4.5b)
UnsecuredUnsecuredFixed at 7.5%Fixed at 7.5%20072007EADB (750m)EADB (750m)
75% enhanced75% enhancedTB+0.5%TB+0.5%20102010Faulu KenyaFaulu Kenya
(500m)(500m)
UnsecuredUnsecuredTB+1%TB+1%20122012PTA Bank (800m)PTA Bank (800m)
75% enhanced75% enhancedTB+1%TB+1%20062006Safaricom (4bn)Safaricom (4bn)
UnsecuredUnsecuredTB+0.75%TB+0.75%20062006EADB (2bn)EADB (2bn)
75% enhanced75% enhancedTB+1.25%TB+1.25%20072007Mabati Rolling MillsMabati Rolling Mills
(1bn)(1bn)
Unsecured/SecUnsecured/Sec
ureduredPricingPricingMaturityMaturityIssuerIssuer
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Case for TTF BondCase for TTF Bond
The Tourist Industry has contributedThe Tourist Industry has contributedsignificantly to the economic revivalsignificantly to the economic revival
Capacity constraints in the majorCapacity constraints in the major
attraction areas could hinder futureattraction areas could hinder future
growthgrowth
New strategies, more local players andNew strategies, more local players andinnovative funding is requiredinnovative funding is required
8/8/2019 Bond Issuance
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Q&AQ&A
THANK YOU.THANK YOU.