Safaricom PLC has obtained regulatory clearance to launch a
Sh40 billion corporate bond to upgrade infrastructure in Kenya and Ethiopia.
The Medium-Term Note (MTN) programme, positions the
telecommunications giant to raise long-term capital through the debt market.
In a public announcement seen by The Star, the company
disclosed that the Capital Markets Authority (CMA) had approved the framework
under Section 30A of the Capital Markets Act.
The approval allows Safaricom to issue various classes of
notes — including green, social and sustainability notes — in multiple
tranches.
“The Board of Directors of Safaricom PLC are pleased to
announce that the Capital Markets Authority has on November 7, 2025, granted
approval for the Company to establish a Medium Term Note programme pursuant to
which the Company will issue notes in an aggregate principal amount of up to
Kenya Shillings Forty Billion,” the Company Secretary Linda Mesa Wambani said.
Safaricom added that it will kick off the programme with the
release of an information memorandum and a pricing supplement for the first
tranche of the notes, known as Tranche 1.
These documents will outline the specific terms of the
offer, including the pricing and tenor.
“The Company intends to launch the MTN Programme with an
information memorandum and a pricing supplement for the issuance of the first
tranche of notes,” the announcement read.
However, the first issuance remains subject to the
determination of final commercial terms and the CMA’s approval of the
corresponding pricing supplement.
Safaricom said it will issue additional updates in due
course as preparations for Tranche 1 progress.
Safaricom become the latest company to get approval to raise
corporate bond after the East African Breweries Limited (EABL).
A corporate bond is a debt instrument issued by a company to
raise capital from investors, who in turn receive regular interest payments and
the return of their principal at maturity.
In financial markets, corporate bonds function as a key source of long-term funding for businesses seeking to expand operations, refinance existing obligations or invest in major projects.
Unlike government
bonds, which are backed by the state, corporate bonds carry varying levels of
credit risk depending on the issuing company’s financial strength.
Analysts note that investors typically buy these securities
for predictable income streams and portfolio diversification.
Companies may issue different categories of bonds —
including investment-grade, high-yield, or sustainability-linked notes — based
on their financing needs and credit profile.
Market observers say the performance and attractiveness of
corporate bonds are influenced by interest rates, economic conditions and the
issuer’s creditworthiness.
