HF Group Borrowed 800 Million Shillings from NIC and Co-op

Mortgage financier HF Group borrowed 800.0 million shillings in short-term loans from NIC Group and Co-operative Bank last according to their 2017 annual report.

According to the statement, HF Group will repay the debt at close to the maximum interest rate allowed by law an indication of its keen interest in getting the funding in order to facilitate payment to investors who participated in their 7.0 billion shillings, 7-year Medium Term Note that matured last year.

The loans, a 500.0 million shilling facility from NIC Group and a 300.0 million shillings note from Co-operative Bank were to be serviced at interest rates of 14.0 percent and 13.0 percent respectively over a one-year period these rates similar to the 7-year Medium Term Note it had issued at 13.0 percent.

These rates are above the 6.3 percent rate that prevailed last year for the interbank market, according to data from Central Bank of Kenya (CBK).

The obligations had grown to 517.3 million shillings on the NIC loan and 309.6 million shillings on the Co-operative Bank loan as at December 2017.

HF Group was also able to tap into the foreign markets, with the bank receiving additional funds from the European Investment Bank (EIB) and Ghana International Bank (GIB).

The loan from EIB amounted to USD 22.0 million (2.2 billion shillings) at an interest rate of 4.3 percent for 7-years, while GIB issued a 2-year loan of USD 15.0 million (1.5 billion shillings) at an interest rate of 5.0 percent above 3-month LIBOR.