Safaricom has recorded overwhelming investor demand for the first tranche of its Medium-Term Note (MTN) programme. This is after receiving applications worth KES 41.6 billion, representing a 175.7 per cent oversubscription against the initial KES 15 billion target.
Following the strong uptake, the telecommunications giant exercised the full KES 5 billion greenshoe option, pushing the total allocation for the first tranche to KES 20 billion, the maximum amount approved for the issuance.
As a result of the heavy demand, Safaricom will refund KES 21.4 billion to investors in line with the allotment terms contained in the Information Memorandum.
Safaricom Chief Executive Officer Peter Ndegwa said the robust investor interest reflects strong confidence in the company’s financial position, performance and long-term strategy.
“We are pleased with the market’s response. It signals confidence not only in our balance sheet, but also in the vision and strategy we are executing. We made a deliberate decision to diversify our funding sources, and this outcome affirms this choice,” said Ndegwa.
The proceeds from the green bond will be directed towards projects aimed at improving operational efficiency, reducing environmental impact and strengthening Safaricom’s sustainability agenda.
Key focus areas include expanding solar power across more base transmission stations, improving power management systems and lowering overall energy consumption.
Ndegwa noted that taking up the greenshoe option allowed more investors to participate in the company’s growth rather than being locked out due to the oversubscription.
“We are pleased to provide a broader range of investment opportunities as the company continues to expand.
We thank all investors, our transaction advisers, the Capital Markets Authority and all stakeholders whose support has made the successful issuance of Tranche 1 of the Medium-Term Note Programme possible.” Ndegwa stated
The green notes are set to be listed and commence trading on the Nairobi Securities Exchange (NSE) on Tuesday, December 16.
The five-year fixed-rate note is priced at 10.4 per cent and will pay interest semi-annually in June and December. A major incentive for investors is that the return is fully tax-exempt, significantly boosting the effective yield.
The successful issuance positions Safaricom as a key player in Kenya’s sustainable finance space while reinforcing investor confidence in green investments.