- I&M Bank is offering a KSh 10 billion bond with a greenshoe option that could push total proceeds to KSh 13 billion, closing May 15, 2026
- The 5.5-year fixed-rate note pays 12.20% per annum semi-annually, making it one of the more attractive yields in Kenya’s current fixed-income market
- Proceeds will refinance approximately USD 50 million in existing foreign-currency Tier 2 debt, reducing I&M’s FX exposure as part of a broader balance-sheet strategy
I&M Bank Kenya is in the market with one of the most closely watched corporate bond offers of 2026. This is a KSh 10 billion fixed-rate note that could balloon to KSh 13 billion if the full 30% greenshoe option is exercised. The offer opened on April 30 and closes at 5:00 pm on May 15, 2026.
The bond pays a fixed rate of 12.20% per annum, with interest distributed semi-annually over a 5.5-year tenor. It targets institutional investors and high-net-worth individuals, with a minimum subscription of KSh 500,000. After listing on the Nairobi Securities Exchange (NSE) on May 21, secondary market trading is in lots of KSh 50,000, giving a broader pool of investors eventual access to the paper.
The Structure: Tier 2 Capital With a Bullet Repayment
This is a subordinated note classified as Tier 2 capital under banking regulations. This means bondholders rank below senior creditors in the event of a default. It carries a bullet repayment structure, meaning the full principal is returned at maturity rather than amortised over the life of the bond.
The note is the first tranche of a KSh 20 billion Medium-Term Note (MTN) programme has the approval both the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK). Standard Investment Bank is the arranger. The full information memorandum and pricing supplement are available on I&M Bank’s investor relations page.
That KSh 20 billion ceiling is deliberate. Group Regional CEO Kihara Maina noted that market sounding suggested demand for a larger issuance, and the MTN structure gives the bank flexibility to return to the market for subsequent tranches under the same programme framework.
Why I&M Is Doing This Now
The timing of the offer is not accidental. I&M Bank’s audited FY2025 results, released in late March 2026, showed group profit before tax climbing 22% year-on-year to KSh 24.2 billion, with total assets expanding 15% to KSh 668.9 billion. Those results gave the bank both the credibility and the runway to approach the market from a position of strength.
Kihara Maina was candid about the logic, saying,
“There is always a balance that you have to strike when issuing debt… This was the right time to get in.”
He pointed to the appetite for fixed-rate paper in a lower-rate environment and the strategic benefit of locking in local-currency funding ahead of upcoming FX debt maturities.
That FX dimension is central to the story. I&M currently holds approximately USD 50 million, roughly KSh 6.5 billion, in existing Tier 2 dollar-denominated debt, some of which matures as early as 2027. Refinancing that exposure into Kenya shilling debt significantly reduces the bank’s vulnerability to currency swings and geopolitical shocks that have kept FX markets choppy.
“This allows us to front-load our planned local currency debt raise… and anticipate the maturities,” Maina said.
How the Yield Stacks Up
At 12.20% per annum, the I&M Bank corporate bond offers a spread above the government securities curve, compensating investors for credit and liquidity risk. With Treasury bill rates and bank deposit rates trending lower following the CBK’s rate-cutting cycle, yield-hungry investors have been increasingly receptive to well-rated corporate paper.
Market observers, including analysts at Mwango Capital, have highlighted the pricing as appropriate relative to the government curve plus a credit spread for a Tier 2 instrument. The subordinated nature of the note is a genuine risk factor. These bonds absorb losses before senior debt, but I&M’s improving capital position and the strong FY2025 performance give investors reasonable comfort on credit quality.
The NSE listing on May 21 is another structural positive. It means investors are not locked in for the full 5.5 years; they can trade out of the position in the secondary market, subject to liquidity conditions.
What to Watch Next
The allotment date is around May 18, with NSE listing following on May 21, 2026. This is the same day I&M Group’s final dividend of KSh 2.25 per share will go to shareholders. That confluence makes the third week of May a significant one for I&M investors across both equity and fixed income.
Investors and analysts will be watching subscription uptake closely.
A heavily oversubscribed book, or full exercise of the KSh 3 billion greenshoe, would be a strong signal of institutional confidence in the bank’s credit story and in Kenya’s corporate bond market more broadly.
The broader KSh 20 billion MTN programme also means I&M could return to the market for a second tranche if demand warrants. For now, the window to participate in Tranche 1 closes on May 15.
