Safaricom has attracted applications amounting to KES 41.6 billion for the first tranche of its Medium Term Note, a level of demand that ranks among the strongest responses to a Kenyan corporate debt issuance this year. The offer was oversubscribed by 175.7 percent against the initial KES 15 billion target.
The telecommunications group will take up the entire KES 5 billion greenshoe, raising the total size of the tranche to KES 20 billion, which is the maximum approved for this phase of the programme. As a result, Safaricom will refund KES 21.4 billion to investors in line with the allotment rules set out in the Information Memorandum.
Peter Ndegwa, Safaricom’s chief executive, said the scale of investor interest reflects confidence in the company’s strategy and financial position.
“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,” he said.
The issuer intends to deploy the proceeds to green initiatives designed to improve operational efficiency and reduce environmental impact. Priority areas include expanded use of renewable energy across its network, with a particular focus on installing additional solar power at base transmission stations, as well as wider upgrades to energy management systems to reduce overall consumption.
Mr Ndegwa added that taking up the greenshoe option broadens access to the company’s growth story.
“Taking up the greenshoe option allows more investors to participate in Safaricom’s growth, rather than locking them out,” he said, while thanking investors, advisers and regulators for enabling the successful close of the tranche.
The green notes are expected to list and commence trading on the Nairobi Securities Exchange on Tuesday, December 16.
The five year fixed rate instrument is priced at 10.4 percent and will pay interest semi annually in June and December. The return is fully tax exempt, a feature that has boosted its appeal and strengthened the effective yield for investors.