Safaricom PLC is poised to inject a massive KSh 40 billion supply of corporate debt into the market, securing regulatory approval for a Medium Term Note (MTN) programme just days after a similar offering from East African Breweries PLC (EABL) was heavily oversubscribed, highlighting intense investor hunger for high-grade private paper.

• •The Capital Markets Authority (CMA) granted approval for the programme on 7 November 2025.
• •The initiative will allow the Trillion shilling telecoms giant to issue notes, including green, social, or sustainability-linked instruments, in various tranches, establishing the largest active MTN programme in the Kenyan market.

The announcement follows strong demand for EABL’s recent issue. EABL closed Tranche 1 of its KSh 20 billion MTN on 10 November with bids of KSh 16.76 billion against a KSh 11 billion target, a 152.4% oversubscription. CMA later approved a full allocation of KSh 16.76 billion in 5-year notes priced at an 11.80% coupon.

Balance Sheet Strategy Drives Safaricom's Move

Safaricom's entry into the bond market is strategically timed to address a clear shift in its debt profile. An analysis of its unaudited half-year results reveals a KSh 13.1 billion surge in short-term borrowings to KSh 55.8 billion as of September 2025.

In the same six-month period, Safaricom’s retained earnings, a key indicator of cumulative profitability, swelled by KSh 40.5 billion to KSh 194.4 billion. This robust earnings power demonstrates a clear capacity to service new debt, a primary comfort for potential bondholders. The company further backs this with a solid cash position of KSh 30.2 billion in net cash and equivalents.

Market Impact and Next Steps

The successful oversubscription of the EABL notes, coupled with Safaricom's blue-chip status and explicit refinancing need, sets the stage for what market analysts anticipate will be another highly competitive book-building process.

Safaricom will launch the programme with an initial tranche, guided by an information memorandum and a pricing supplement detailing the final terms. The issuance of this first tranche remains subject to the determination of its final commercial terms and subsequent CMA approval.

The Company Secretary, Linda Mesa Wambani, confirmed the company will provide further updates on the Tranche 1 issuance in due course.