Safaricom PLC has raised KES20 billion ($154 million) from the telco's maiden tranche of its KES40 billion medium-term note (MTN) unveiled last month after investors poured in with nearly triple its target amount, oversubscribing the raise by 75.7 percent.

The company had initially sought to raise KES15 billion, but overwhelming demand pushed the subscription to 175.7 percent, prompting Safaricom to activate a KES5 billion “green shoe option”—a clause that allows it to absorb part of the extra offering.

“Safaricom has received applications totaling KES41.4 billion for the first tranche of its Medium Term Note, an oversubscription of 175.7 percent against the initial KES15 billion target,” Safaricom said in a statement on Wednesday. 

“Taking up the greenshoe option allows more investors to participate in Safaricom’s growth, rather than locking them out,” said CEO Peter Ndegwa.

He added, “We are pleased to provide a broader range of investment opportunities as the company continues to expand. I would like to thank all investors, our transaction advisers, the Capital Markets Authority and all stakeholders whose support has made the successful issuance of Tranche 1 of the Medium-Term Note Programme possible.”

According to the Nairobi Securities Exchange, the overwhelming response received on Safaricom PLC capital raise "is a powerful affirmation of the market’s capacity to mobilize large-scale financing and support transformational corporate initiatives."

The NSE added: "In response to this exceptional demand, Safaricom has activated its KES5 billion green shoe option, raising the Tranche 1 allotment to KES20 billion. 

This adjustment allows the issuer to effectively accommodate heightened investor appetite while remaining within the KES40 billion programme approved by the Capital Markets Authority."

The strong appetite expressed by investors for Safaricom’s debt weeks after similar trend noted in East African Breweries Debt as well as a private placement by Family Bank demonstrates renewed confidence in Kenya’s financial markets and economy.

In November, the CMA approved Safaricom’s KES40 billion ($308 million) capital raise for green projects, offering the telco chance to opened sales for the first batch of notes, known as “Tranche 1,” on 5th December. 

“This milestone is a testament to the vibrant ecosystem and strong liquidity,” the NSE explained on Wednesday, noting the market’s ability to fund major corporate goals.

According to CMA's approval note, Safaricom has the opportunity to return to the market in the future to raise the rest of the KES40 billion ($308 million) programme, potentially issuing green or social bonds to fund sustainable projects. 

Safaricom has lined up investments in renewable energy such as expanding solar power across more base transmission stations and systems improvements to power management as well as initiatives to cut energy usage.

The notes from this sale will be trading at the Nairobi bourse, offering investors a tradable asset from the region's most profitable company.

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