The East African Breweries Plc (EABL) has announced early redemption of its Ksh11 billion corporate bond issued under the company’s 2021 Medium Term Note Programme (MTN Programme).
EABL, in a notice dated October 13, 2025, announced that it will repay the Ksh11 billion corporate bond at the end of this month — a full year ahead of its scheduled maturity on October 29, 2026.
According to the listed alcoholic beverage manufacturer, the early redemption will take effect on October 29, 2025, and will include repayment of both the principal amount and accrued interest to date.
Bondholders listed on the Central Depository register by October 14, 2025 (Record Date) will be eligible for the payout.
The early redemption will mark the conclusion of the 2021 MTN Programme, under which the bond was issued. Upon completion, the notes will be delisted from the Nairobi Securities Exchange’s Fixed Income Segment.
“The Notes will be redeemed at an amount equal to the principal amount, together with accrued but unpaid interest from the preceding Interest Payment Date,” read part of the notice.
Why EABL is repaying early
EABL’s Chief Financial Officer Risper Ohaga confirmed that the early redemption is aimed at reducing the company’s finance costs, boosting liquidity, and enhancing its debt profile.
She said the bond repayment is being funded through a mix of financial arrangements and short-term bridge financing.
“EABL has a robust capital management strategy and continues to optimise its balance sheet to enhance financial efficiency,” Ms. Ohaga told BD.
The corporate bond, which carried a fixed interest rate of 12.25%, has cost the brewer Ksh1.34 billion in annual interest expenses since its issuance in October 2021.
The high cost of servicing the debt became more pressing following the Central Bank of Kenya’s rate hikes to curb inflation and support the shilling.
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EABL has since restructured part of its debt, shifting to bank loans and short-term government securities that are cheaper. Recent auction results show that EABL can access short-term financing at an average rate of 7.93%, significantly lower than the bond rate.
The company’s borrowings dropped from Ksh41.4 billion in 2024 to Ksh. 34.8 billion by June 2025, reflecting aggressive debt reduction efforts.
The shift is also driven by compliance with Capital Markets Authority (CMA) guidelines, which require companies to maintain strong liquidity ratios.
The bond, had it stayed to maturity, would have increased short-term liabilities, affecting the company’s credit risk profile.
Implications for the market
The bond repayment is expected to shrink the corporate bond market, which has been under pressure in recent years following high-profile defaults.
EABL’s exit comes at a time when investors are favoring government securities over corporate paper due to lower perceived risk. The move also positions EABL to pursue lower-cost borrowing and maintain financial flexibility amid a tightening economic environment.
In the year ended June 30, 2025, EABL posted a profit of Ksh12.198 billion. The EABL Board of Directors said the net revenue grew by 49% to Ksh128.8 billion, while volume grew 2% as both beer and spirits registered growth across markets.
The profit before tax stood at Ksh19.312 billion, and the income tax expense was Ksh7.114 billion. Profit after tax grew 12% to Ksh2.2 billion, driven by topline growth, foreign exchange gains, and lower finance costs realized through the reduction of both debt and interest rates. These offset the impact of one-off costs during the year.
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Cash and cash equivalents of Ksh12.7 billion, on the other hand, increased by Ksh1.9 billion, driven by revenue growth and lower cost of debt. Total debt, including overdraft, reduced by Ksh8.3 billion, contributing to lower finance costs.
Dividend
The Board of Directors recommended a final dividend of Ksh5.50 per share, subject to withholding tax. This dividend is scheduled for payment on or about October 28, 2025, to shareholders who are duly registered at the close of business on September 16, 2025.
If approved, the total dividend for the year will amount to Ksh8.00 per share, up from Ksh7.00 in 2024. “The EABL Board has declared a final dividend of Ksh5.50 per share, bringing the total dividend to Ksh8.00 per share, 14.3% above last year,” said Martin Oduor, the Group Chairman.
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