Safaricom has secured regulatory approval to float a Ksh.40 billion medium-term note programme, marking one of the largest corporate bond issuances in Kenya’s history and signalling renewed vibrancy in the local debt market.

Market analysts say the move underscores a growing appetite among corporates seeking predictable, long-term funding as opposed to more expensive or complex equity options.

Safaricom plans to issue the Ksh.40 billion in multiple tranches, including green and sustainability-linked bonds, to support infrastructure expansion in Kenya and Ethiopia.

“It is the highest we have seen. The Ksh.40 billion is a significant amount, but given Safaricom’s strong cash generation even at half-year, the company is in a solid position to absorb it,” noted Wesley Manambo, Senior Research Associate at SIB.

Safaricom’s entry into the market follows a wave of recent corporate issuances.
East African Breweries PLC (EABL) floated an Ksh.11 billion, five-year fixed-rate note that recorded oversubscriptions.
Family Bank has raised a total of Ksh.10.62 billion from both public and private bond placements.
Meanwhile, the Kenya Mortgage Refinance Company’s (KMRC) debut Ksh.1.4 billion bond attracted nearly five times more investor interest, receiving bids exceeding Ksh.8 billion.

Analysts attribute this renewed enthusiasm to several structural advantages of debt instruments.

“Debt is cheaper than equity. Raising money through a rights issue is often lengthy and tedious, while debt issuance is more straightforward. Investors also appreciate the ability to trade these instruments in the secondary market, improving liquidity,” Manambo explained.

Experts say the momentum reflects a financial sector that is becoming more sophisticated, with companies increasingly confident in tapping the bond market for affordable capital.

“As markets deepen and firms continue to grow and build credibility, they naturally gravitate toward bond markets for cheaper financing. It speaks to the maturity of Kenya’s capital markets, which is very encouraging,” Manambo added.

The expanding corporate bond space is expected to diversify funding channels for local businesses, spur investment opportunities for the public, and support major national development initiatives.