Safaricom has sought to reassure investors about the strength and appeal of its Domestic Medium-Term Note (DMTN), despite the bond being issued without any security.
As the telecommunications firm rolled out the first tranche of the note, concerns around unsecured lending were addressed by the company’s Group Chief Finance Officer, Dilip Pal, who pointed to Safaricom’s solid financial position as the main safeguard for investors.
According to Pal, the company’s robust balance sheet and consistent cash generation place it in a strong position to meet its obligations. He noted that investors can rely on Safaricom’s financial strength to ensure timely interest payments and full repayment of principal at the end of the five-year term.
Safaricom’s latest financial results underline this confidence. In the most recent financial year, the company recorded net cash from operating activities amounting to KSh137.7 billion, while group operating cash flow reached KSh148.9 billion. The firm also crossed a major milestone by posting revenues of KSh388.7 billion for the first time.
The green bond offer, which closes on December 5, will be listed on the Nairobi Securities Exchange, allowing investors the flexibility to trade the bond before maturity if they wish.
Priced at a fixed, tax-free interest rate of 10.4 per cent, the bond offers investors a predictable return over its five-year lifespan, further enhancing its attractiveness.
Safaricom says the combination of strong financial performance, market liquidity through NSE listing, and competitive returns positions the DMTN as a compelling investment option.
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