The value of the corporate bond market has soared four times in the past year, following a series of issuances driven by renewed investor interest and a rebound in debt-raising activities by firms seeking expansion capital.
Issued and outstanding corporate bonds now top Sh105.3 billion after successive borrowings from March 2025 by firms including Linzi Finco, East African Breweries Plc (EABL), Safaricom Plc, I&M Bank Limited and the Kenya Mortgage Refinance Company (KMRC).
In contrast, outstanding corporate bonds stood at only Sh25.9 billion in March last year before the start of rapid issuances, which have been supported by low interest rates on the traditional government bonds, incentivising investors to explore alternative asset classes.
This has diversified offerings for investors, with the corporate bonds offering annual returns of between 10.4 percent and 12.2 percent.
Government bonds are generating yields of between 8.9 percent and 14.7 percent in the secondary market at the Nairobi bourse.
The Sh44.79 billion Talanta Sports City-backed infrastructure bond, which was fully subscribed, kicked off the most recent corporate bond issuance run in June last year. Investors offered Sh44.875 billion, achieving a slight oversubscription of 100.2 percent.
The 15-year asset-backed bond with an annual return of 15.04 percent was listed on the Nairobi Securities Exchange (NSE) on July 8, in the restricted fixed income market sub-segment.
Proceeds from the bond were deployed to pay the contractor of the project, the China Road and Bridge Corporation (CRBC), which is tasked with works including the construction of a 60,000-seater stadium.
Sources indicated to this publication that the bond, which was issued by Linzi FinCo, the financing arm of the Liaison Group, was taken up exclusively by local investors.
EABL followed Linzi Finco to market, raising Sh16.7 billion in November 2025 from the first tranche of new Sh20 billion medium-term notes (MTN).
The brewer initially aimed to raise Sh11 billion from the opening tranche but saw investor subscription levels top 152.4 percent.
The firm took up its option of absorbing an additional Sh6 billion, which is referred to as a green-shoe option, leaving it with the headroom to borrow an additional Sh3.23 billion in future tranches.
EABL is set to deploy proceeds from the bond for general business purposes and to repay other borrowings.
The manufacturer made an early redemption of a previous five-year paper with an outstanding amount of Sh11 billion, and which was set to mature on October 30, 2026, before starting its latest MTN programme.
Safaricom rounded off 2025’s corporate bond issuances by raising Sh19.9 billion from the first tranche of its Sh40 billion MTN programme after a 177 percent oversubscription of the offer.
Total bids received for the issue were Sh41.6 billion, surpassing Sh15 billion telco.
The operator took up a Sh5 billion green-shoe option, accepting Sh20 billion from investors.
Safaricom’s bond was listed at the Nairobi bourse on December 11.
Analysts credited the rebound in the corporate bond market to the low-interest regime, which has incentivized investors to search deeper for relatively higher returns.
“With government yields stabilising and credit spreads normalizing, investors are actively rotating into well-rated corporates that offer a yield pick-up above comparable sovereign securities,” a research analyst told this publication previously.
The NSE has seen two corporate bond listings this month, including issuances of Sh13 billion by I&M Bank and Sh3 billion by KMRC.
I&M’s bond listed at the NSE on March 21 and is part of a larger Sh20 billion MTN programme expected to strengthen the lender’s capital position whilst diversifying the bank’s funding sources.
The bank is expected to use part of the proceeds from the bond to retire dollar-denominated debt, estimated at $50 million (Sh6.5 billion).
KMRC became the latest issuer to list a bond on the NSE after raising Sh3 billion from a second tranche bond which forms part of a Sh10.5 billion MTN programme that commenced in 2022.
The mortgage refinancing company issued a Sh1.4 billion first tranche bond in March 2022 which currently has an outstanding amount of Sh742.13 million.
The firm expects to return to market in 2028 with a third tranche issuance as it seeks to raise the remaining Sh4.9 billion from the medium-term bonds programme.
Other outstanding bonds include Sh3.8 billion Family Bank’s medium-term notes and Sh390.9 million Real People MTN issued in August 2015 and whose maturity is set for July 2028.
A further Sh3 billion Sharia-compliant bond by the Linzi Finco Trust is listed on NSE’s unquoted securities platform (USP).
Real People bond holders have been in a limbo after the firm defaulted on payments between 2015 and 2018 alongside Chase Bank, Imperial Bank, ARM Cement and Nakumatt Holdings.
The defaults which surpassed Sh10 billion in total culminated in a corporate bonds issuance drought as investors became weary of shaky issuers.
In the wake of the defaults, most of the remaining corporate bonds were repaid but fewer borrowers returned to the market for refinancing.
Those that settled their bonds on maturity included HF Group and CIC Insurance Group.