East African Breweries PLC (EABL) has received regulatory approval from the Capital Markets Authority (CMA) to raise up to KSh 20 billion through a Domestic Medium Term Note Programme, the company announced on Monday, October 27, 2025. The capital raised will be listed and traded on the Nairobi Securities Exchange (NSE), signalling a significant move to tap local capital markets for financing.

The programme's initial offering, or first tranche, aims to raise KSh 11 billion. This five-year bond comes with a fixed annual interest rate of 11.80%. The offer period for investors opened on Monday, October 27, 2025, and is scheduled to close on Monday, November 10, 2025. With a minimum subscription set at an accessible KSh 10,000, the offer targets both retail and institutional investors across Kenya.

Strategic Refinancing

A primary objective of this capital raise is to refinance existing debt at a more favourable interest rate. Specifically, the proceeds will be used for the early redemption of a KSh 11 billion bond issued in 2021, which carried a higher fixed interest rate of 12.25%. That bond was set to mature on October 29, 2026, but EABL has opted to redeem it a year ahead of schedule. By refinancing this debt at the lower 11.8% rate, EABL anticipates reducing its annual finance costs by approximately KSh 49.5 million.

According to EABL's Chief Financial Officer, Risper Ohaga, the decision was driven by improved market conditions and a significant reduction in interest rates since 2021. This strategic move is expected to extend the company's debt maturity profile and improve its liquidity position. The early redemption prevents the 2021 bond from being reclassified as a short-term liability, which would have negatively impacted the company's current ratio—a key measure of liquidity monitored by the CMA.

Use of Proceeds and Market Context

Beyond refinancing, the funds will be allocated to general corporate purposes, which include financing investments, supporting working capital, and funding future growth projects. The company has stated that the new note programme will not increase its overall debt levels. As of June 2025, EABL's total borrowings had decreased to KSh 34.8 billion from KSh 41.4 billion the previous year, reflecting a broader strategy to manage its debt load amid challenging economic conditions.

EABL's return to the corporate bond market is a notable event for the NSE, which has experienced a drought in new corporate bond issuances for the past three years. The last major issuance was by the Kenya Mortgage Refinance Company (KMRC) in 2022. The successful oversubscription of EABL's 2021 bond, which attracted bids worth KSh 37.9 billion against an KSh 11 billion target, demonstrated strong investor confidence in the company and the potential for a revived corporate debt market.

Key Timelines and Advisors

The timeline for the first tranche is clearly defined. Following the closure of the offer on November 10, 2025, the allotment of the notes is set for November 12. The official issue date and payment is November 18, and the notes will be credited to investors' Central Depository and Settlement Corporation (CDS) accounts by November 20, 2025.

A consortium of financial institutions is managing the issuance. Absa Bank Kenya PLC and Absa Securities Limited are the lead arrangers and placing agents. Other key partners include Coulson Harney LLP (Bowmans Kenya) as the legal adviser, PricewaterhouseCoopers LLP (PwC) as the reporting accountant, and MTC Trust & Corporate Services Limited as the note trustee.