East African Breweries Plc (EABL), Kenya’s leading regional beverage manufacturer, has successfully completed the listing of its KES 16.76 billion bond on the Nairobi Securities Exchange, marking a significant milestone in the company’s capital markets strategy and signaling renewed confidence in Kenya’s corporate debt market. The bell-ringing ceremony held on Tuesday, November 25, 2025, celebrated what company executives described as a pivotal moment that reflects both the brewer’s financial strength and the maturation of Kenya’s capital markets infrastructure.
The successful issuance, which forms the first tranche of EABL’s KES 20 billion Medium-Term Note (MTN) Programme, was oversubscribed by an impressive 52.4 percent, with investors tendering bids totaling KES 16.76 billion against an initial target of KES 11 billion. The overwhelming market response prompted the company to exercise a green-shoe option, allowing it to accommodate an additional KES 6 billion beyond the initial target, leaving headroom to borrow approximately KES 3.23 billion in future tranches under the programme.
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Strategic Timing Capitalizes on Favorable Market Conditions
The decision to return to the bond market now represents a strategic move to capitalize on prevailing market conditions, specifically the significant reduction in interest rates since the company’s previous KES 11 billion bond issuance in October 2021. Risper Ohaga, EABL’s Group Chief Financial Officer, explained that interest rates had declined substantially since the 2021 issuance, making this an opportune moment to issue new notes.
The new notes carry an attractive 11.80% annual coupon rate paid semi-annually over a five-year term, with maturity set for November 18, 2030. This represents a favorable rate compared to the 12.25% coupon on the 2021 bond that was redeemed early to facilitate this new issuance. For a like-for-like comparison on KES 11 billion of principal, the new bond will cost the company approximately KES 1.29 billion in annual interest compared to KES 1.34 billion under the old bond, demonstrating tangible financial benefits from the refinancing.
The timing proves particularly astute given the broader monetary policy environment. Kenya’s Monetary Policy Committee has cut the Central Bank Rate from 13.00% in August 2025 to 9.25% in October 2025, a reduction of 375 basis points that has created a more accommodative environment for corporate borrowing. The low interest rate environment has opened a window for corporate borrowing, enabling EABL to tap the market through its medium-term note programme at favorable terms.
Overwhelming Investor Demand Reflects Market Confidence
The 52.4% oversubscription represents a powerful endorsement of EABL’s creditworthiness and strategic direction. According to Lawrence Kibet, Director General for Public Investments and Portfolio Management at the National Treasury, this bond marks the first phase of EABL’s KES 20 billion Medium-Term Note Programme, demonstrating institutional confidence in the company’s long-term prospects.
Jane Karuku, EABL’s Group Managing Director and CEO, highlighted that the oversubscription represents a significant endorsement of the company’s growth agenda and strategic execution. “Today’s milestone reflects the confidence that investors continue to place in EABL’s performance, resilience, and strategic direction,” Karuku stated during the announcement. “The success of this first tranche is a major endorsement of our growth agenda and the disciplined execution of our long-term strategy. It also illustrates a maturing capital market, where investors are increasingly willing to back long-term corporate instruments from stable and reputable issuers.”
The strong investor appetite reflects several factors including EABL’s brand strength, predictable cash flows, long operating history, and proven track record of financial performance. Market analysts noted that the subscription reflects a robust appetite for quality corporate paper as the macroeconomic environment shows signs of stabilization, offering investors renewed confidence in the local capital markets.
Deployment of Bond Proceeds
The funds raised from this MTN programme will be strategically utilized to finance investments, repay debts, refinance short-term borrowings, and provide essential working capital for EABL’s operations and expansion plans across East Africa. The refinancing aspect is particularly significant as it helps ease pressure on the brewer’s short-term liquidity and reduces financing expenses.
With a year to go until redemption of the old bond, the existing obligation would have been reclassified as a short-term liability, potentially reducing the company’s liquidity score. The Capital Markets Authority requires EABL to maintain a current ratio — the proportion of short-term assets to short-term obligations — of more than one. The ratio, which stood at 1.11 times in the year ended June 2025, indicates the company’s ability to meet its short-term obligations. By refinancing with longer-dated paper, EABL extends its debt profile and boosts liquidity metrics.
The company structured this as a Medium-Term Note programme rather than a single bond issue, which means they can tap the market again later for the remaining KES 3.23 billion when needed, providing strategic flexibility to match funding needs with market opportunities.
Strong Financial Foundation Underpins Bond Success
The successful bond issuance comes on the back of robust financial performance that demonstrates EABL’s resilience and growth trajectory. For the year ended June 30, 2025, EABL reported a 12% rise in profit after tax to KES 12.2 billion, powered by strong performance across its portfolio of beer and spirits brands in Kenya, Uganda, and Tanzania.
Net sales increased by 4% to KES 128.8 billion, with both beer and spirits delivering volume growth across the company’s three core markets. The growth was sustained by a combination of revenue expansion, reduced finance costs, and favorable foreign exchange gains. Finance costs dropped significantly to KES 5.9 billion from KES 8.1 billion in the previous year, following an KES 8.3 billion reduction in debt and the benefits of lower interest rates.
According to EABL’s Annual Report for the year ended June 30, 2025, the company’s net borrowings stood at KES 39.3 billion, down from KES 47.1 billion in 2024, representing a reduction of approximately KES 7.7 billion or 16.4%. This substantial deleveraging demonstrates management’s commitment to strengthening the balance sheet and reducing financial risk.
Cash and cash equivalents rose to KES 12.7 billion, while basic earnings per share improved from KES 10.30 to KES 11.97. In line with the strong performance, the Board recommended a final dividend of KES 5.50 per share, bringing the total dividend for the year to KES 8, a 14% increase from the previous year. This translates into a payout of KES 6.3 billion to shareholders, demonstrating the company’s commitment to returning value while maintaining financial flexibility.
CEO Jane Karuku’s Strategic Leadership
The successful bond issuance reflects the strategic leadership of Jane Karuku, who has served as EABL’s Group Managing Director and CEO since January 1, 2021. Under her guidance, EABL has achieved significant financial milestones, cementing its status as East Africa’s leading brewer with a valuation exceeding $1 billion.
By the end of the 2024 fiscal year, the company’s revenue had grown to KES 124.65 billion, up significantly from KES 85.6 billion in 2021. This growth was driven by strategic investments in product diversification, market expansion, and operational efficiency improvements. Karuku has overseen the launch of several new products tailored to meet evolving consumer preferences, including Snapp Dry Cider, Baileys Strawberries and Cream, and Casamigos Tequila.
“We continue to invest in our brands and broaden our portfolio to stay relevant with today’s consumers,” Karuku noted in commenting on the company’s strategic direction. “Our strong portfolio, coupled with brilliant commercial execution, enabled us to deliver these results despite a tough environment.”
Beyond financial performance, Karuku’s impact extends to her leadership in promoting sustainability, gender equity, and youth empowerment. Her advocacy for diversity has reshaped corporate leadership in East Africa, and her role as Chairperson of the Kenya COVID-19 Fund and member of Kenya’s Vision 2030 Board demonstrates her commitment to broader societal impact.
Market Reception and Settlement Process
The success of the offer demonstrates EABL’s confidence in the depth of the local capital markets. The settlement process was designed for efficiency, with notes credited to successful investors’ Central Depository and Settlement Corporation (CDSC) accounts by November 20, 2025. The CDSC operates Kenya’s automated book-entry system for securities settlement, providing secure and efficient custody services for investors.
The notes were officially listed on the Nairobi Securities Exchange under the Fixed Income Securities Market Segment on November 25, 2025. Listing on the NSE provides several benefits, including enhanced liquidity through secondary market trading, greater transparency through disclosure requirements, and potential inclusion in bond indices tracked by institutional investors. The listing also subjects EABL to ongoing disclosure obligations, providing bondholders with regular updates on the company’s financial performance and material developments.
Successful bidders will receive semi-annual interest payments on May 18 and November 18 of each year up to and including the maturity date in 2030. This bi-annual payment structure is standard for corporate bonds and provides investors with regular income streams that can be reinvested or used to meet ongoing financial obligations. Investors must be on the register 15 calendar days before each interest payment date to qualify for coupon payments.
Broader Context: Kenya’s Corporate Bond Market Revival
EABL’s successful bond listing occurs against a backdrop of increasing corporate engagement with local debt markets, signaling a strong shift toward large-scale domestic financing. The 52% oversubscription offers insights into Kenya’s evolving economic landscape and investor sentiment toward corporate securities.
Safaricom Plc received approval from the Capital Markets Authority on November 7 to establish its own Medium Term Note programme worth up to KES 40 billion. The telecommunications giant is taking a different route by keeping options open for green, social, or sustainability bonds, though they haven’t specified what projects they’ll fund yet. The telco officially entered the market with its ambitious debt offering shortly after EABL’s successful listing.
These back-to-back moves by two of Kenya’s corporate heavyweights suggest that large companies are finding the local bond market workable again after months of uncertainty. Whether that confidence holds depends on how stable the macroeconomic environment actually stays, but the willingness of blue-chip companies to raise significant sums domestically represents a positive signal for market development.
The oversubscription highlights increased investor appetite for corporate debt despite the bullish momentum of the Nairobi Securities Exchange’s equity market. The Nairobi All Share Index (NASI) has grown by 51.5% since January 2025, with market capitalization surpassing the KES 3 trillion mark earlier in November, supported by strong corporate earnings, new listings, and increased liquidity. The fact that corporate bonds remain attractive even amid strong equity market performance suggests genuine diversification demand from institutional investors.
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Macroeconomic Stabilization Supports Market Recovery
The renewed confidence in corporate bonds reflects broader macroeconomic stabilization efforts that have improved Kenya’s investment climate. In the first half of 2025, EABL observed an improved macroeconomic environment marked by easing inflation, falling interest rates and appreciation of the currency in Kenya and Uganda, though challenges persisted including reduced disposable income and rising input costs.
Kenya’s Central Bank Rate currently stands at 9.25%, down from 13.00% in August 2025, representing one of the most aggressive monetary easing cycles in recent years. The Monetary Policy Committee is scheduled to meet on December 9, 2025, with market participants watching for potential further rate adjustments. If the MPC decides to cut rates again, it would mark the ninth consecutive reduction this year, continuing a pattern of trimming the rate by 25 basis points.
The persistent rate cuts underscore the Central Bank’s commitment to bolstering industry growth and economic expansion through a more accommodative monetary strategy. The falling interest rate environment has created favorable conditions for corporate borrowing while maintaining attractive yields for investors seeking fixed-income investments.
However, market analysts caution that fiscal pressures remain a consideration. Constrained fiscal conditions and increased government borrowing needs could limit the policymaking leeway of the Central Bank. Should fiscal pressures persist, heightened domestic borrowing might crowd out private sector credit, potentially affecting future corporate bond issuances.
Professional Advisory Team
The EABL notes programme benefited from a comprehensive team of professional advisors and service providers, reflecting the complexity and importance of the transaction. Absa Bank Kenya served as the arrangers and placing agents, responsible for structuring the debt programme, coordinating the issuance process, and marketing the bonds to potential investors.
The professional advisory structure demonstrates the sophistication required for large-scale corporate debt issuances in Kenya’s capital markets. The involvement of established financial institutions provides credibility and ensures compliance with regulatory requirements while facilitating efficient distribution to institutional and retail investors.
Regional Tax Contributions and Economic Impact
Beyond its role as a leading corporate borrower, EABL reaffirmed its position as one of the largest tax contributors in East Africa. In Kenya, the group paid over KES 52 billion in excise duties, VAT, and corporate taxes during the 2025 financial year. In Uganda, tax remittances from Uganda Breweries Ltd amounted to approximately UGX 1.5 trillion (approximately KES 51 billion), making it one of the country’s top five taxpayers.
In Tanzania, Serengeti Breweries Ltd contributed more than TZS 600 billion (around KES 30 billion) in taxes to the government. Combined, the group’s tax contributions across the three markets exceeded KES 133 billion in 2025, underscoring the company’s significant role in public revenue generation and economic development.
EABL also employs thousands directly through its breweries in Nairobi, Kampala, and Dar es Salaam, while supporting tens of thousands more through distribution, retail, and local sourcing of raw materials such as barley, sorghum, and cassava. This extensive economic footprint reinforces the company’s importance to regional economic stability and growth.
Brand Portfolio and Market Position
EABL’s strong market position and diversified brand portfolio provide the foundation for its successful capital markets strategy. The company operates an exceptional collection of brands across beer and spirits, combining local favorites with international premium offerings.
The beer portfolio includes flagship brands such as Tusker, Guinness, Bell Lager, Serengeti Lager, and WhiteCap, which continue to dominate their respective markets. In the spirits category, the company offers Kenya Cane, Chrome Vodka, Johnnie Walker, Captain Morgan, and Smirnoff, among others. This outstanding combination of local jewels and international premium spirits provides diversified revenue streams and resilience against market fluctuations.
In Uganda, Bell Lager, Pilsner Lager, and Uganda Waragi drove volumes, supported by a recovery in consumer spending. In Kenya, Tusker Lager, Guinness, and WhiteCap maintained strong market positions, while in Tanzania, Serengeti Lite and Serengeti Premium Lager anchored growth. Premium spirits like Johnnie Walker, Singleton, and Baileys achieved double-digit growth across all three markets, reflecting successful premiumization strategies.
Challenges and Resilience
Despite the strong financial performance and successful bond issuance, EABL’s business continues to face significant challenges. According to the Kenya Institute for Public Policy Research and Analysis (Kippra), around 15 million Kenyans drink regularly, with 12 million reportedly spending an average of KES 100 per occasion. However, shrinking disposable income has impacted consumer spending patterns across the region.
Speaking during an investor briefing, EABL board chairman Martin Oduor-Otieno pleaded with regional governments to carefully consider policies that do not harm investors and the general economy. His comments came as Kenya proposed a National Policy for the Prevention, Management and Control of Alcohol, Drugs and Substance Abuse, which includes sweeping recommendations such as banning alcohol sales in supermarkets, petrol stations and restaurants, and raising the legal drinking age from 18 to 21 years.
Additionally, illicit trade continues to grow, necessitating extra efforts from government to mitigate the impact of unregulated alcohol trade. High costs of material inputs and currency volatility remain concerns, though EABL’s productivity agenda has helped cushion the impact of input cost inflation.
“Our business continued to demonstrate resilience and strength against a backdrop of mixed macroeconomic conditions across the region,” Chairman Oduor-Otieno stated. “While the broader East African economy showed signs of recovery and relative stability, external pressures persisted amidst shrinking disposable income and rising input costs.”
Sustainability Initiatives
Beyond financial performance, EABL has advanced its sustainability agenda through initiatives such as Project Rudisha, the business’s spirits bottles reuse programme, accelerating water efficiencies, and expanding use of biomass steam plants. These environmental, social and governance (ESG) priorities demonstrate the company’s commitment to long-term sustainable operations that create value for multiple stakeholders.
The company has made progress on its long-term environment, social and governance priorities to preserve and replenish water resources, decarbonize production, and adopt a positive culture and behavior across its workforce to mitigate operational challenges. These initiatives enhance the company’s reputation and appeal to ESG-conscious investors who increasingly factor sustainability considerations into investment decisions.
Looking Ahead: Strategic Priorities
Looking to the future, EABL has articulated clear strategic priorities focused on sustainable growth and value creation. The company will continue leveraging its strengths while navigating the evolving landscape with agility and determination. Sustained investment in the iconic brand portfolio and elevated commercial execution will remain central to capturing consumer opportunities.
The accelerated productivity agenda will continue to cushion the impact of input cost inflation while supporting margin management. EABL will maintain focus on innovation, launching new products that meet evolving consumer preferences while optimizing its portfolio mix to capture growth across different price points and consumption occasions.
The company remains committed to executing its strategy with discipline, building on the foundation established in recent years while remaining prudent and optimistic about growth prospects. Management’s focus on reducing net debt while investing in long-term growth opportunities demonstrates a balanced approach to capital allocation that supports both shareholder returns and business expansion.
Conclusion
The successful listing of EABL’s KES 16.76 billion bond on the Nairobi Securities Exchange represents far more than a corporate financing transaction. It signals renewed confidence in Kenya’s capital markets, validates the country’s macroeconomic stabilization efforts, and demonstrates the appetite of investors for quality corporate paper from established issuers with strong fundamentals.
The 52.4% oversubscription underscores the maturation of Kenya’s capital markets, where investors are increasingly sophisticated in evaluating corporate credit and willing to commit capital to long-term instruments. For EABL, the successful issuance provides financial flexibility to pursue growth initiatives while optimizing its capital structure through refinancing at favorable rates.
As Kenya’s corporate bond market continues to develop, EABL’s successful issuance sets a positive precedent that may encourage other quality corporates to tap domestic debt markets. The transaction demonstrates that despite macroeconomic challenges, there is substantial depth and sophistication in Kenya’s institutional investor base to support significant corporate borrowing programmes.
For the broader market, the success of both EABL’s bond and Safaricom’s forthcoming issuance suggests that 2025 may mark a turning point for corporate debt in Kenya — a shift from reliance on bank lending and offshore funding toward a more balanced capital structure that includes domestic bond markets as a core component of corporate finance strategy. This development bodes well for the continued evolution and sophistication of Kenya’s financial markets infrastructure.
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By: Montel Kamau
Serrari Financial Analyst
27th November, 2025
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