I&M Bank Limited has opened a public offer of fixed-rate Medium-Term Notes seeking KSh 10 billion in its first tranche under a KSh 20 billion programme, entering a corporate debt market that has been transformed by an unprecedented monetary easing cycle. The 5.5-year notes, priced at 12.20% per annum with semi-annual interest payments, will be listed on the Nairobi Securities Exchange. A 30% greenshoe option of up to KSh 3 billion is available should demand exceed the base target. The issuance arrives after the Central Bank of Kenya delivered ten consecutive rate cuts totalling 425 basis points since August 2024, compressing borrowing costs and triggering a wave of corporate issuance from blue-chip names including EABL and Safaricom. I&M Bank, rated A+ by Fitch, reported 29% growth in profit before tax to KSh 17.4 billion for 2025, underpinning its case to investors.
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Key Overview
- Offer size: KSh 10 billion first tranche under a KSh 20 billion programme, with a KSh 3 billion greenshoe option if demand exceeds target.
- Coupon rate: 12.20% per annum, paid semi-annually, on unsecured subordinated 5.5-year notes.
- CBK easing cycle: Ten consecutive rate cuts since August 2024 brought the benchmark to 8.75% from a 12-year high of 13%, the most aggressive easing run in Kenya’s history.
- Corporate bond wave: EABL raised KSh 16.76 billion against an KSh 11 billion target (152% oversubscription) in November 2025; Safaricom’s green bond attracted KSh 41.6 billion in bids against a KSh 15 billion target (176% oversubscription) in December 2025.
- I&M Bank financials: FY2025 profit before tax at group level reached KSh 24.2 billion, up 22%, with customer deposits of KSh 484 billion and 98% digital adoption among transacting customers.
- Timeline: Offer opened 30 April 2026, closes 15 May 2026, with listing on 21 May 2026. Minimum subscription is KSh 500,000.
Kenya’s Corporate Bond Market Comes Alive
For years, Kenya’s corporate bond segment lived in the shadow of government securities. The Nairobi Securities Exchange listed a handful of corporate instruments at any given time, and the pipeline of new issuance was thin. That has changed dramatically over the past six months, as a confluence of falling interest rates, strong corporate earnings, and growing investor appetite has produced what market participants describe as the busiest period ever for Kenyan corporate debt.
The catalyst has been the Central Bank of Kenya’s prolonged easing cycle. Between August 2024 and February 2026, the monetary policy committee cut its benchmark rate ten consecutive times, reducing it by a cumulative 425 basis points from a 12-year high of 13% to 8.75%. CBK Governor Kamau Thugge indicated in February that there remained “scope for additional easing” without inflationary pressure, though the committee paused in April 2026 citing Middle East conflict risks.
The rate cuts have compressed funding costs across the economy. Average commercial bank lending rates fell to 14.7% in March 2026 from 17.2% in November 2024, while deposit rates averaged around 7%. This yield environment has created a window where corporate paper — offering returns above government benchmarks but below traditional bank lending rates — has become highly attractive to both institutional and retail investors.
EABL and Safaricom Set the Pace
East African Breweries Plc opened the current issuance cycle in November 2025, launching the first tranche of a KSh 20 billion Medium-Term Note programme. The response was emphatic: EABL received bids totalling KSh 16.76 billion against its KSh 11 billion target, a 152% oversubscription that prompted the brewer to exercise its full KSh 6 billion greenshoe option. The five-year notes were priced at an 11.80% coupon. EABL CEO Jane Karuku described the demand as evidence of “a maturing capital market” where investors were willing to back long-term corporate instruments from reputable issuers.
Safaricom followed within weeks, securing CMA approval on 7 November 2025 for the largest corporate bond programme in Kenyan history — a KSh 40 billion MTN that could include green, social, and sustainability-linked instruments. The inaugural tranche, a KSh 15 billion green bond, attracted KSh 41.6 billion in bids — a staggering 176% oversubscription. Safaricom exercised the full KSh 5 billion greenshoe, bringing total allocation to KSh 20 billion.
The Safaricom bond was groundbreaking in several respects. At a tax-exempt rate of 10.4%, it became Kenya’s largest green bond. It was also the first corporate bond in the country to accept subscriptions via mobile phone through USSD, with a minimum investment of just KSh 50,000 — a fraction of I&M Bank’s KSh 500,000 threshold. About 2,453 individual investors placed bids worth KSh 39.9 billion, accounting for 96% of total demand.
The effect on the broader market was immediate. Individual corporate bond investors at the NSE nearly quadrupled to 2,966 in the quarter to December 2025, and corporate bond trading turnover rose to KSh 203 million from KSh 108 million in the prior quarter.
I&M Bank Enters the Queue
I&M Bank’s KSh 10 billion note offer represents the latest entrant in this increasingly busy pipeline. The notes carry specific characteristics that distinguish them from the recent EABL and Safaricom issuances.
The 12.20% coupon sits above the prevailing 10-year government benchmark yield of roughly 12.70–13.00%, offering a credit spread consistent with the notes’ subordinated status. Unlike Safaricom’s senior unsecured green bonds, I&M Bank’s instruments are unsecured subordinated obligations, ranking pari passu with other subordinated creditors but below depositors and general creditors. This subordinated structure means the notes will count towards the bank’s Tier II capital, strengthening its regulatory capital position.
“The proceeds are intended to support lending, enhance funding resilience and strengthen our capital position in line with our strategic priorities,” said Kihara Maina, I&M Bank Group Regional CEO. Beyond Tier II capital strengthening, proceeds will fund onward lending and long-term growth initiatives.
The offer opened on 30 April 2026 and closes on 15 May 2026, with listing on the NSE set for 21 May 2026. The minimum subscription of KSh 500,000 positions the issuance primarily towards institutional and high-net-worth investors, in contrast to Safaricom’s retail-friendly KSh 50,000 entry point. Standard Investment Bank is lead arranger and placing agent, with The Co-operative Bank of Kenya as receiving bank, Walker Kontos Advocates as legal advisor, and KPMG Kenya as reporting accountants.
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I&M Bank’s Financial Position
I&M Bank enters the debt market from a position of strength. At the group level, I&M Group PLC reported profit before tax of KSh 24.2 billion for the year ended December 2025, a 22% increase over the prior year. Profit after tax attributable to shareholders surged 27.6% to KSh 18.78 billion. Total operating income grew 19.2% to KSh 60.33 billion, driven by a 16% rise in net interest income and a 31% increase in non-interest income.
I&M Bank Kenya, the group’s anchor business, delivered its own strong set of numbers. The Kenyan subsidiary reported 22% growth in total operating income to KSh 40.4 billion, with profit before tax rising 29% to KSh 17.4 billion. Net interest income grew 17% while non-interest income surged 41%, reflecting the bank’s push into fee-generating businesses. Customer deposits grew 15% to KSh 439 billion despite what management described as a tight operating environment. Asset quality improved, with the gross non-performing asset ratio declining from 14.3% in 2024 to 13.3% in 2025.
The group’s balance sheet provides further comfort. Total assets stood at approximately KSh 589 billion at the half-year mark. The liquidity ratio of 59.68% sits well above the 20% minimum requirement, while all capital adequacy ratios exceed statutory minimums. Non-performing loans at group level fell from KSh 13.40 billion in 2024 to KSh 8.93 billion in 2025.
The bank holds an A+ national long-term credit rating from Fitch, placing it among the most highly rated corporate issuers in Kenya. The group has also accelerated digital transformation, achieving 98% digital adoption among transacting customers and launching new platforms like I&M FX Direct.
Beyond banking, I&M Group has been diversifying aggressively. Its wealth management arm saw assets under management grow 223% to close at KSh 99 billion, while its bancassurance intermediary recorded underwritten premiums of KSh 4.7 billion, up from KSh 2.8 billion the previous year. The group operates across five countries — Kenya, Uganda, Tanzania, Rwanda, and Mauritius — with regional subsidiaries contributing 24% of group profit before tax.
A Crowded but Healthy Pipeline
I&M Bank is not alone in tapping the market this week. Kenya Mortgage Refinance Company opened its own KSh 3 billion sustainability note on 28 April 2026, one day before I&M Bank’s offer. KMRC’s sustainability fixed-rate notes carry an 8-year amortising tenor with a weighted average life of 5.11 years, and proceeds will be used to refinance eligible green and social home loans under its sustainable finance framework.
Including these new issuances, the number of listed corporate bonds on the NSE has grown from a handful to seven instruments as at end-2025, with more expected as conditions remain favourable. Other listed issuers include Family Bank, whose KSh 8 billion MTN matures in December 2026, and Linzi Finco Trust.
Safaricom is also expected to return for a second tranche of its KSh 40 billion programme, having thus far issued KSh 20 billion of the total. The telecoms firm’s capital expenditure requirements for the year to March 2026 were estimated at between KSh 72 billion and KSh 78 billion, driven by network investment in Kenya and its costly Ethiopian operation.
The Macroeconomic Backdrop
The favourable conditions underpinning the corporate bond wave are supported by Kenya’s broader macroeconomic trajectory. GDP grew an estimated 5% in 2025, with the CBK projecting growth of 5.3% in 2026. Inflation has remained subdued — at 4.4% in March 2026, well below the 5% midpoint of the central bank’s target range — providing room for accommodative monetary policy.
Private sector credit growth picked up to 8.1% in March 2026 from negative 2.9% in January 2025, signalling a meaningful recovery in credit demand. Demand improved in building and construction, trade, agriculture, and consumer durables as lending rates fell.
Kenya’s banking sector as a whole reported exceptional results in 2025. Tier 1 listed banks booked a combined KSh 269 billion in profits attributable to shareholders, while collectively declaring KSh 111 billion in dividends. This earnings strength has improved investor confidence in bank-issued debt instruments, reducing the credit risk premium that bond buyers demand.
However, risks remain. The CBK’s April 2026 decision to pause its easing cycle reflected concerns about Middle East conflict disrupting supply chains and driving energy prices higher. The current account deficit widened to 2.4% of GDP and could reach 3% if oil costs continue rising. Non-performing loans across the banking sector, while declining, remained at 15.6% in March — still elevated by historical standards.
What It Means for Investors
For investors evaluating I&M Bank’s offer, the 12.20% coupon must be weighed against several factors. The subordinated nature of the notes means that in a stress scenario, bondholders rank behind depositors and senior creditors. The 5.5-year tenor locks in capital for a relatively long period in a market where rate direction could shift.
On the other hand, I&M Bank’s A+ rating, 29% profit growth, improving asset quality, and strong capital ratios provide a credible credit story. The coupon offers a meaningful pickup over the 10-year government bond benchmark and over the recent Safaricom and EABL issuances, reflecting the additional risk of subordination.
The minimum subscription of KSh 500,000 ensures the investor base will be weighted towards institutions and high-net-worth individuals, which could support orderly price discovery in the secondary market after listing.
A New Chapter for Kenya’s Capital Markets
The burst of corporate bond activity represents something more than a cyclical response to lower rates. It signals a structural deepening of Kenya’s capital markets. Blue-chip corporates have demonstrated that the local market can absorb multi-billion-shilling issuances with strong oversubscriptions. Retail investor participation has expanded dramatically, and the range of instruments — from green bonds to sustainability notes to subordinated bank paper — is diversifying.
For I&M Bank, the issuance is both a capital management exercise and a statement of ambition. By strengthening its Tier II capital and locking in long-term funding, the bank is positioning itself to grow its loan book and expand its regional footprint at a time when Kenya’s economy is accelerating. Whether the market delivers the same oversubscription seen in EABL and Safaricom’s offerings will be the first test of whether investor appetite extends beyond the very largest names on the Nairobi bourse.
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