EABL Announces Early Redemption of KSh11 Billion Corporate Bond

Published By The Statesman For The Statesman Digital
2 hours ago

East African Breweries PLC (EABL) has announced plans to redeem its Sh11 billion corporate bond ahead of schedule, in a move aimed at strengthening its balance sheet and reducing interest expenses.

The brewer, in a notice issued on October 13, said it will exercise its right of early redemption for the outstanding Sh11 billion Medium-Term Notes issued under its 2021 MTN Programme.

The redemption will take effect on October 29, 2025, and bondholders will receive the full principal amount together with accrued interest up to and including the redemption date.

According to the brewer, payments will be made to persons registered as holders of the notes in the Central Depositories and Settlement Corporation (CDSC) register as of October 14, 2025.

Following the payout, the notes will be delisted from the Fixed Income Securities Market Segment of the Nairobi Securities Exchange (NSE), marking the conclusion of the MTN Programme.

“East African Breweries PLC hereby gives notice to all holders of the outstanding KSh11 billion Medium Term Notes of the intention to exercise its right of early redemption in accordance with the terms of the Notes,” said the company secretary, Angela Pearl Namwakira.

“On the early redemption date, the amount due will comprise the principal and accrued but unpaid interest up to and including October 29, 2025.”

The bond, issued in October 2021, carried a fixed interest rate of 12.25 percent and has been costing the brewer about Sh1.34 billion annually in coupon payments.

The early redemption allows EABL to cut financing costs and avoid the bond being classified as a short-term liability in its next financial statements.

EABL’s 2021 bond was oversubscribed by 275 percent, attracting Sh37.9 billion against the target of Sh11 billion, underlining investor confidence in the brewer’s financial stability.

The proceeds were used to refinance short-term obligations and support working capital needs.

The company has since been working to reduce its debt exposure.

By June 2025, EABL’s total borrowings had declined to Sh34.8 billion, from Sh41.4 billion the previous year, according to regulatory filings.

The early bond redemption also adds to the thinning list of active corporate bonds at the Nairobi Securities Exchange, a market segment that has seen reduced activity in recent years due to defaults and low investor appetite.