KCB Group Plans Sh300B MTN Bond Program, Sh100B First Tranche

In short

• KCB Group plans to raise Sh100 billion by October 2026 as the first tranche of a Sh300 billion medium-term note programme.
• The lender expects to list the first tranche on the Nairobi Securities Exchange in November, subject to regulatory approvals.
• The programme includes green, blue, and sustainability bonds aimed at funding environmental and social projects.

What happened

KCB Group says it is preparing a five-year Sh300 billion medium-term note programme, starting with a Sh100 billion bond raise targeted by October 2026. A medium-term note, or MTN, is a way for a company to borrow money from investors by issuing debt that usually runs for five to 10 years.

KCB expects the first tranche to be listed on the Nairobi Securities Exchange in November, if regulators approve. If that happens, it would lift the value of issued and outstanding corporate bonds on the NSE to about Sh205.3 billion.

KCB executives said the programme could be issued in both Kenyan shillings and US dollars. The proposed mix is either 50:50 or 60:40, depending on market conditions. Issuing in dollars can attract foreign investors, but it also adds currency risk, meaning repayments can become more expensive if the shilling weakens.

The bank has also launched a Sustainability Bond Framework. This is a set of rules that defines which projects can receive funding from proceeds raised through labelled bonds.

Why it matters

KCB plans to issue green, blue, and sustainability bonds under the programme. Green bonds fund climate and environment-related projects like renewable energy, energy efficiency, clean transport, and waste management. Blue bonds fund sustainable use of water resources, such as fisheries, water quality monitoring, and low-emission maritime transport. Sustainability bonds combine green and social projects.

For Kenya’s capital markets, a larger and more frequent pipeline of corporate bonds could deepen liquidity and give institutional investors more options beyond government securities.

It also signals improving demand for corporate debt in Kenya. Recent deals have been oversubscribed, including Safaricom which saw Sh41 billion in bids for a Sh15 billion green bond. The renewed appetite follows a long period of weak issuance after high-profile bank defaults hurt investor confidence.