Corporate Bonds Market Ignites on EABL, Safaricom Notes

Corporate Bonds are now the new attraction as investors seek these debt instruments with renewed interest and stronger appetite.

The bull run that has been on in the Equities market also seems to be taking a breather, as foreign investors shift to the US markets in anticipation of a rally and another rate cut by the Federal Reserve, all slowing activity at the Nairobi Securities Exchange(NSE).

With Equities sluggish, Investors are turning to other option. The case of East African Breweries Limited(EABL) KSh 11 billion Corporate Bond, which was 52% oversubscribed enabling the issuer to it to borrow above its target a sum of KSh16.8Billion from the debt market, utilizing a green shoe option.

This is a classical example of  current trends where investors with excess cash are looking for returns in fixed income securities and other asset classes.

Picking up the cue from EABL, Safaricom-another blue-chip at the Nairobi Securities Exchange(NSE), rushed in with its KSh 40 Billion worth of  Notes, the largest in Kenya’s corporate bond history.

East African Breweries has already listed its latest corporate bond at the NSE while Safaricom sale of the first tranche worth KSh 15 million in green bonds closes on December 5^th 2025. The green bond has a fixed coupon rate of 10.4%, is tax exempt and has a 5-year tenor.‘

Safaricom’s green corporate bonds, which is expected to attract huge investor interest, is scheduled to be listed at the NSE on December 16^th 2025. Investors are required to make a minimum investment amount of KSh 50,000, a requirement that is bound to attract a huge number of retail investors.

Drivers Behind Renewed Investor Appetite for Corporate Bonds.

Analysts attribute the huge appetite for corporate bonds to falling interest rates that is prompting many blue-chip companies to consider tapping into the debt market for more favourable pricing.

With the Central Bank Rate(CBR) at 9.25%, corporates are seizing the opportunity to source debt at lower costs.

“Both short and long term interest rates are heading south, so investors are chasing return with the corporate debt. The current issuers also have a good credit rating and the instruments have seniority in case of default, “said Eric Musau, Director of Research, Standard Investment Bank(SIB).

While at the bell ringing ceremony for the EABL Notes at the Nairobi Securities Exchange(NSE), its Chief Executive Jane Karuku praised the strong investor response to its bond issuance.

“The success of this first tranche illustrates a maturing capital market, where investors are increasingly willing to back long-term corporate instruments from stable and reputable issuers,” said Mrs. Karuku.

Corporate Bond Issuers and Traded Volumes

Available data from the Capital Markets Authority(CMA)third quarter 2025 report shows that Kenya’s outstanding corporate bonds were valued at KSh 25.99 billion as of June 30, 2025.

Fund managers and nominee accounts held most outstanding corporate bonds, amounting to KSh10.3 billion or 40%.

Investment companies followed with 37%, while banks accounted for 17% of the outstanding bond holdings.

Corporate Bond Issuers as at June 30^th 2025 included EABL, Family Bank, Kenya Mortgage Refinance Company, Linzi Finco Trust and Batian Income Properties.

The KSh 8 billion Family Bank Medium Term Note, that had its first tranche issued in 2021, has a maturity date of December 31^st 2026.

The KSh 1.4billion bond by Kenya Mortgage Refinance Company matures on 23^rd February 2029. The KSh 6.5 billion Linzi Finco Trust, which had an outstanding amount of KSh 3 billion as at March 2025, matures on 3^rd May 2039.

CMA quarterly data also shows that turnover value of traded bonds stood at KSh 684.01 billion in Q3, up from KSh 666.46 billion recorded in the quarter ended June 2025, representing an increase of 2.65%.

Notably, Corporate Bonds traded during Q3 2025 hit a turnover of KSh107.85 million, compared to a turnover of KSh1.25 million in Q2 2025.

Family Bank has announced that it will be making the 9^th interest payment to its KSh 8 billion bond holders on Friday, December 19, 2025.

Market watchers view the oversubscribed KSh 11 billion EABL Bond as a reflection of robust appetite for quality corporate paper, boosted by a conducive and a stable macroeconomic environment.

According to East African Breweries CEO Mrs. Karuku, positive response to the firm’s Bond issuance reflects the confidence that investors continue to place in the brewer’s performance, resilience, and strategic direction.

Investors are thus likely to endorse bond issuance by any reputable firm of the East African Breweries stature that has a clear growth agenda and disciplined execution of its long-term strategy.

Lawrence Kibet, Director General, Public Investments and Portfolio Management congratulated the EABL Board and Management for buttressing bond issuers’ confidence in Kenya’s domestic market through the listing of the first tranche of its KSh 20 billion Medium-Term Note Programme on the NSE.

Investment bankers view success of EABL Bond Issuance as a testament to the strength of Kenya’s financial ecosystem and the increasing sophistication of the country’s investor base.

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