I&M Bank has listed the first tranche of its Kenya Shilling-denominated Medium-Term Note (MTN) Programme on the Nairobi Securities Exchange (NSE) following strong investor demand. The offer attracted KSh23.23 billion in applications against an initial target of KSh10 billion, resulting in an oversubscription rate of more than 232%. The bank ultimately raised KSh13 billion after exercising a green shoe option. The listing highlights growing investor appetite for corporate bonds and reflects the continued revival of Kenya’s corporate debt market.
Key Overview
- I&M Bank has listed the first tranche of its MTN Programme on the NSE.
- The offer attracted KSh23.23 billion in bids against a KSh10 billion target.
- The issue achieved an oversubscription rate of approximately 232%.
- I&M accepted KSh13 billion after exercising a KSh3 billion green shoe option.
- The bond carries a tenor of 5.5 years and a coupon rate of 12.20%.
- Part of the proceeds will refinance a US$50 million IFC subordinated facility maturing in 2028.
- Secondary market trading is now available with a minimum investment of KSh50,000.
- Kenya’s corporate bond market has surpassed KSh100 billion in cumulative value over the past year.
I&M Bank Debuts New Corporate Bond on NSE
I&M Bank has officially listed the first tranche of its Kenya Shilling-denominated Medium-Term Note (MTN) Programme on the Nairobi Securities Exchange, marking another milestone in the ongoing revival of Kenya’s corporate bond market.
The listing follows an exceptionally successful public offer that attracted significant investor interest, demonstrating growing confidence in corporate debt instruments as an alternative investment option.
Investors submitted applications worth KSh23.23 billion against the planned KSh10 billion fundraising target, resulting in one of the strongest corporate bond performances seen in recent years.
The strong demand underscores increasing appetite among institutional and retail investors seeking attractive fixed-income opportunities amid evolving market conditions.
Strong Investor Demand Drives Oversubscription
The public offer recorded an oversubscription rate of approximately 232%, meaning investor demand exceeded the initial target by more than double.
In response to the overwhelming interest, I&M Bank exercised a KSh3 billion green shoe option, allowing it to increase the amount raised from the market.
As a result, the lender accepted KSh13 billion in subscriptions rather than limiting the issuance to the original KSh10 billion target.
The successful fundraising exercise reflects growing confidence in the bank’s financial strength and highlights the increasing attractiveness of corporate bonds among investors looking for predictable income streams and portfolio diversification.
The strong response also signals the depth of liquidity currently available within Kenya’s capital markets.
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Bond Structure Offers Attractive Returns
The first tranche of the MTN Programme carries a tenor of 5.5 years and offers investors a coupon rate of 12.20%.
The competitive return attracted substantial interest from investors seeking higher yields than those available through many traditional savings products and money market instruments.
With the notes now officially listed on the Nairobi Securities Exchange, investors can buy and sell the securities on the secondary market, providing additional flexibility and liquidity.
To encourage broader participation, the minimum bid size has been set at KSh50,000, making the instrument accessible to a wider range of investors beyond large institutions.
The secondary listing ensures that investors who did not participate during the primary offer period can still gain exposure to the bond through market trading.
Proceeds to Support Capital and Refinancing Needs
Alt Text:I&M Bank plans to use proceeds from its bond issuance to strengthen its capital base and partially refinance a US$50 million IFC subordinated facility, helping optimize its funding structure, meet regulatory capital requirements, and support future growth initiatives while managing upcoming financing obligations.
Beyond raising new capital, part of the proceeds will be used to strengthen I&M Bank’s capital structure and manage upcoming financing obligations.
The issuance will partially refinance a US$50 million subordinated facility previously provided by the International Finance Corporation (IFC). The facility is scheduled to mature in March 2028, with repayments expected to begin in September 2026.
By refinancing a portion of this Tier II capital instrument through the domestic bond market, I&M Bank can optimize its funding structure while maintaining regulatory capital requirements and supporting future growth initiatives.
The transaction therefore serves a dual purpose: enhancing capital flexibility and ensuring efficient management of existing liabilities.
Corporate Bond Market Continues Strong Revival
The success of the I&M Bank issuance comes amid a broader resurgence in Kenya’s corporate bond market.
Over the past 12 months, corporate issuers have increasingly turned to capital markets as an alternative source of funding outside traditional bank loans. This renewed activity has helped push the cumulative value of the corporate bond market beyond KSh100 billion.
The I&M offer represents the latest successful issuance in a series of corporate bond transactions that have attracted significant investor demand.
Since November 2025, four consecutive corporate bond offers on the Nairobi Securities Exchange have collectively attracted approximately KSh50.79 billion in investor applications, highlighting the growing popularity of fixed-income securities among market participants.
The trend reflects improving market confidence and a greater willingness by investors to allocate capital to corporate debt instruments.
Joining a Growing List of NSE Corporate Bonds
The newly listed I&M bond joins an expanding roster of corporate debt instruments available on the Nairobi Securities Exchange.
Other notable corporate bonds currently listed include the Real People MTN, Family Bank MTN, Linzi 003 IABS Fixed MTN, East African Breweries Limited (EABL) Domestic MTN, Safaricom MTN, Kenya Mortgage Refinance Company (KMRC) MTN, and the KMRC Sustainability MTN.
The growing diversity of listed corporate bonds provides investors with a wider range of fixed-income opportunities across different sectors of the economy.
For issuers, the increasing success of these offerings demonstrates that Kenya’s capital markets are becoming an increasingly viable avenue for raising long-term funding.
What the Listing Means for Investors
The successful listing provides investors with another avenue to access relatively high-yield fixed-income investments while supporting the growth of Kenya’s banking sector.
The bond’s 12.20% coupon rate, combined with its 5.5-year maturity profile, may appeal to investors seeking stable returns in a diversified portfolio.
At the same time, secondary market availability enhances liquidity, allowing investors to adjust their positions as market conditions evolve.
The strong oversubscription also reflects broader confidence in Kenya’s financial sector and the increasing sophistication of the country’s capital markets.
Outlook
I&M Bank’s successful KSh13 billion bond listing highlights the growing strength of Kenya’s corporate debt market and investor appetite for high-quality fixed-income securities. With applications exceeding KSh23 billion and a subscription rate of more than 232%, the issuance reinforces the role of capital markets as an important funding channel for corporate borrowers. As more institutions seek alternative financing options, Kenya’s corporate bond market appears well positioned for continued growth and deeper investor participation.
Sources: Kenyan Wallstreet, Trading Groom, The Star, Capital Business
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