Safaricom has secured regulatory approval to raise up to KES 40 billion through a new bond program, marking one of the biggest domestic fundraising initiatives by a Kenyan company in recent months.
The Capital Markets Authority signed off on the plan on November 7, giving Kenya’s largest telecommunications company the go-ahead to establish what’s called a Medium Term Note program. The company made the announcement public today through Company Secretary Linda Mesa Wambani.
Instead of issuing one massive bond all at once, Safaricom will release the money in smaller chunks called tranches. This gives them flexibility to raise funds as they need them and adjust to market conditions along the way.
The bonds themselves could take different forms. Safaricom has the option to issue green bonds, social bonds, or sustainability bonds. These specialized instruments are designed to fund projects with environmental or social benefits, though the company hasn’t specified exactly what they plan to finance yet.
The first batch, labeled Tranche 1, is still being finalized. Safaricom will release an information memorandum and pricing supplement that spell out the exact terms – things like interest rates, maturity dates, and how investors can participate.
That paperwork still needs final CMA approval before anything moves forward.
Safaricom wrapped up a major debt cleanup in November 2023 when it paid off a $400 million loan that had funded its controversial expansion into Ethiopia.
That loan had exposed the company to currency risk, and clearing it dropped their foreign-denominated debt to about KES 8.2 billion.
Now they’re borrowing again, but this time entirely in Kenyan shillings. The shift to local currency fundraising shields them from the wild swings in exchange rates that have hammered companies with dollar obligations. It’s a strategic retreat to safer ground after learning that lesson the hard way.
Safaricom’s move comes right after East African Breweries pulled off a successful bond sale. EABL raised KES 16.76 billion in their first tranche, blowing past their KES 11 billion target. That offer closed on November 10, and investors got their allocations by November 20.
The strong appetite for EABL’s bonds suggests investors are ready to put money into well-known Kenyan corporates, which bodes well for Safaricom’s upcoming sale.
The company says more details about Tranche 1 will come out soon, but they’re playing it close to the vest for now.
