Safaricom CEO Peter Ndegwa addresses participants during 2025 sustainable business report launch. [File, Standard]
Safaricom said on Tuesday evening its debut green bond was oversubscribed by 175.7 per cent drawing Sh41.6 billion in investor bids and allowing it to raise Sh20 billion for sustainability projects.
The strong demand for the five-year, fixed-rate note, which was priced at 10.4 per cent signals robust investor appetite for high-grade corporate debt in the country and confidence in Safaricom's strategic direction.
The company had initially targeted Sh15 billion for the first tranche of its Medium-Term Note Programme.
Due to the oversubscription, it exercised a full Sh5 billion "greenshoe" option to increase the total issue to Sh20 billion, the maximum approved for this tranche. It will refund Sh21.4 billion to unsuccessful applicants.
"The strong uptake reflects investors’ confidence in the company’s performance, prospects and strategic direction," Safaricom Chief Executive Officer Peter Ndegwa said in a statement.
"We made a deliberate decision to diversify our funding sources, and this outcome affirms this choice."
Proceeds from the bond will be earmarked for "Eligible Green Projects" under the company's Sustainable Finance Framework. These include expanding solar power installations across its base transmission stations and implementing systems to improve energy efficiency and reduce overall consumption.
The bond's 10.4 per cent coupon offers a premium over the Kenyan government's most recent five-year bond, which was priced at a yield of 9.847 per cent in November. A key attraction for investors is its tax-exempt status, which enhances the effective yield.
The oversubscription signals healthy liquidity in the market for quality corporate paper and aligns with a growing investor focus on environmental, social, and governance (ESG) criteria. Safaricom, Kenya's most profitable company, holds an 'AA' credit rating from GCR.
"Taking up the greenshoe option allows more investors to participate in Safaricom’s growth, rather than locking them out," Ndegwa said.
The notes, which are senior unsecured debt, will pay interest semi-annually in June and December. They are set to be listed and begin trading on the Nairobi Securities Exchange on December 16, 2025.
The public offer, which opened on November 25, had a minimum subscription of Sh50,000, making it accessible to retail investors. The joint lead arrangers were SBG Securities Limited, Stanbic Bank Kenya Limited, and Standard Chartered Bank Kenya Limited.
This tranche is part of Safaricom's larger Sh40 billion Domestic Medium Term Note Programme, marking a significant shift by the company to tap the local debt market for its expansion and green financing.
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Safaricom said on Tuesday evening its debut green bond was oversubscribed by 175.7 per cent drawing Sh41.6 billion in investor bids and allowing it to raise Sh20 billion for sustainability projects.
There will be selective statements about where we are coming from and where we are today. You can also expect new “third to first world” exhortations about where we are headed next.