Safaricom PLC has announced that the Capital Markets Authority of Kenya (CMA) has cleared the company to set up a KES 40B Medium Term Note (MTN) programme, allowing it to issue green, social, or sustainability bonds, with proceeds earmarked for infrastructure upgrades among other purposes. The company is expected to provide guidance on the first tranche, including the size of the offer, coupon structure, tenor and other key terms.
The Safaricom MTN comes at a time when borrowing conditions have eased significantly, with interest rates falling across the curve following a series of Monetary Policy Committee (MPC) cuts that have lowered the Central Bank Rate (CBR) to 9.25% from 13.00% in January 2024. The decline in the benchmark yields has opened a window for corporates to tap the debt market at more favourable pricing.
Appropriate Timing for MTN Program
This low-interest rate environment has provided an opportunity for companies to source debt in the capital markets. On 18th November 2025, East African Breweries PLC (EABL) floated the Tranche I of its MTN programme which had received approval by the CMA on 12th November 2025. The Tranche I issue drew KES 16.76 billion in bids against an offer of KES 11 billion, reflecting an oversubscription rate of 52.4%. The Diageo PLC subsidiary and regional brewer exercised its green-shoe option and took up the full amount at a coupon rate of 11.8%. The proceeds have been earmarked for the refinancing of its KES 11B MTN program issued in 2021, which was priced at a coupon rate of 12.25%.
The MTN programme by EABL, and the approval of Safaricom’s KES 40B MTN programme revitalize Kenya’s corporate bond market after a subdued period. Available data from the CMA places corporate bond issues in Kenya at KES 33.3 billion, with an outstanding amount of KES 25.99 billion as at the end of March 2025. In a question put to Safaricom’s Chief Financial Officer Dilip Pal in an interview on China Global Television Network (CGTN) with Ramah Nyang regarding the possibility of issuing an MTN given the low interest-rate environment, Dilip pointed out that the timing was right for the company to go to market to issue debt.
“As we speak, we are currently doing a review of our profile of debt. Let us say that it needs to change and of course there is timing and we have to think about that. I think its part of the current review cycle that we are growing through and we’ll see how that thing plays out and you’re right from a current market perspective looks like its a good time.” – Safaricom PLC CEO, Dilip Pal.
As at the end of the 2024/2025 fiscal year (fiscal year ended 31st March 2025), Safaricom’s net debt at the Group narrowed to KES 129.8 billion from KES 140.2 billion recorded in the 2023/2024 financial year. The Kenyan operation closed the year with KES 64.5 billion in net debt, translating to a net debt/EBITDA ratio of 0.31 from 0.29 in fiscal 2023/2024. Recent data for the half year period ended 30th September 2025 (HY 2025/2026) showed that net debt for Safaricom Kenya was unchanged at KES 64.5 billion with the net debt/EBITDA ratio unchanged at 0.31.
In Ethopia, local currency debt closed fiscal 2024/2025 at USD 105M, in addition to a shareholder loan of USD 18M and IFC debt totaling USD 100M. Recent disclosures as of HY 2025/2026 indicated that these numbers were unchanged.
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