Acorn Holdings Limited (AHL) is poised to repay its Sh5.7 billion Acorn Green Bond Medium Term Note (B2 rating by Moody’s) ahead of its scheduled maturity date of November 8, 2024.
In the first week of October 2024, AHL will repay up to Sh2.7 billion in principal, along with accrued interest to bondholders.
Launched in 2020, this Sh5.7 billion Green Bond was Africa’s first Green Housing Bond and the first to be cross-listed on both the London Stock Exchange’s International Securities Market (ISM) and the Nairobi Securities Exchange (NSE). The bond has supported the development of safe, affordable, and eco-friendly purpose-built student accommodation (PBSA) for university students.
The early repayment underscores Acorn’s financial prudence and the strength of its underlying portfolio, which has enabled it to fulfill its commitments to investors.
Guaranteed for 50% of the principal and interest by GuarantCo (A1 Stable), AHL also provided a corporate guarantee for the Notes. AHL, along with the Issuer and Project Entities, are obligated under the Notes’ terms.
Initially issued before the onset of the global COVID-19 pandemic in 2019, the Green Bond revitalized Kenya’s corporate bond market and spurred the development of certified green assets in the region. It attracted over Sh5.5 billion through the ASA REITs from local pension funds, facilitating co-investment opportunities.
For Acorn, the bond catalyzed investment in its PBSA portfolio, including a Sh6.7 billion green facility from ABSA and an additional USD 180 million from the United States Department of Finance Corporation.
The Bond is currently part of the Acorn Student Accommodation Development REIT (ASA D-REIT) and financed the development of six PBSA assets, totaling up to 7,000 beds. The largest properties, Ǫwetu and Ǫejani Chiromo, opened in August 2024, accommodating over 2,500 students.
All projects are completed, with four transferred to the I-REIT and two in the stabilization phase. Acorn has successfully refinanced the bond to support stabilization and future exit into the I-REIT.
Beyond improving educational access through quality student housing, the Green Bond has generated over 2,000 direct jobs, 7,000 indirect jobs, and an additional 10,000 induced jobs. It has also stimulated the local construction supply chain and enhanced credit access for small, particularly female-owned, SMEs. The bond supported the development of green assets with on-site renewable energy, reducing the carbon footprint and minimizing greenhouse gas emissions, as properties are within walking distance of universities.
Recognized by the Climate Bonds Initiative, all developments are IFC EDGE certified, and the funds have achieved GRESB 4-star certification. AHL has also been honored as an EDGE Champion in Africa for its dedication to sustainability and green initiatives.
The Green Bond, which was oversubscribed during its upsizing in 2021, has so far provided investors with over Sh1.4 billion in coupon payments in addition to the principal.
