Acorn announces intention to exercise an early redemption option of Sh800.2Million

This is a portion of outstanding notes issued under the bond program.

In a public notice, Acorn said the redemption will be effected on or before the 31st of this month, at an amount equal to the nominal value of the notes, together with accrued interest from the preceding interest payment.

The Green Bond was launched in 2019 and then upsized through a second tranche in 2021, totalling Sh5.7 billion. The second tranche was oversubscribed by 46 per cent.

“As projects continue to be executed, we draw down from the commitments given by Note Holders to fund the expenditures related to those projects. It has always been part of the constitution of the Green Bond that Acorn is able to repay the debt attached to any single project once it is sold and proceeds are generated,” said Acorn in response to questions about the early redemption.

Qwetu Aberdare Heights, the first property launched to serve students primarily of United States International University –Africa(USIU) at Mirema, became operational in Q1 2021

In line with the business structure, the property is in the process of being acquired by the Acorn Student Accommodation Income REIT (also launched in February 2021 along with the ASA D-REIT), with the total consideration for the acquisition being Sh1.78 billion.

“From the sale proceeds, we will now look to repay the debt attached to this project and so as a result, Acorn will be redeeming Sh800 million from the Green Bond. The early loan redemption is a validation of the Acorn business structure.”

This redemption follows the Sh777million Qwetu Wilson View redemption from the Green Bond in May 2021.

Acorn says that, to date, Sh4.2 billion has been drawn down from the Green Bond with 1.6 billion being redeemed (following Qwetu Aberdare Heights transaction in 2022 and the Wilson View transaction in 2021).

The net outstanding loan now stands at Sh2.6 billion whilst Sh1.5 billion remains available for draw down.