I&M Bank has launched a public Medium-Term Note programme worth up to KShs 20 billion, opening one of its most significant funding rounds in recent years as it accelerates lending and expands across the region.
The first tranche targets KShs 10 billion. A 30 percent greenshoe option — a provision that allows the bank to accept excess demand — could push the total raised to KShs 13 billion if investor appetite comes in strong. The offer opened on 30 April 2026 and closes on 15 May, with allotment scheduled for 18 May and listing on the Nairobi Securities Exchange fixed for 21 May.
What Investors Are Being Offered
The notes will list on the Main Fixed Income Securities Market Segment of the NSE, giving investors the ability to trade them after issuance. The first tranche runs for five and a half years, pays a fixed interest rate on a semi-annual basis, and returns the full principal at maturity.
Two terms matter here. The notes are unsecured, meaning no specific asset backs them. They are also subordinated, meaning they rank below senior creditors in any default scenario. Investors take on more risk than they would with secured debt — and the pricing should reflect that.
Where the Money Goes
Group CEO Kihara Maina framed the purpose plainly: “This proposed note issuance reflects our confidence in the bank’s long-term strategy, underlying business strength and disciplined approach to growth. The proceeds are intended to support lending, enhance funding resilience and strengthen our capital position in line with our strategic priorities.”
In practice, the funds serve three purposes. They expand the bank’s loan book for businesses and individual borrowers. They finance the bank’s regional growth plans. And they bolster its Tier II capital base — the regulatory buffer that determines how much a bank can lend relative to its size. More Tier II capital means more room to grow without breaching Central Bank of Kenya requirements.
The Numbers That Back the Raise
The timing reflects confidence built on results. For the year ended December 2025, I&M recorded a 29 percent rise in profit before tax. Operating income grew 23 percent. Customer deposits reached KShs 349 billion, and net loans stood at KShs 218 billion — pointing to sustained credit demand across its markets.
The bank also carries a national long-term credit rating of A+ from Fitch Ratings, which signals relatively low default risk within the Kenyan market. Combined with a clean track record on previous note issuances, that rating gives the bank a credible platform from which to attract pension funds, fund managers, and institutional investors.
Why Banks Prefer Medium-Term Notes Over Single Bond Issues
MTN programmes have gained traction among East African lenders for a structural reason. Rather than issuing one large bond and absorbing the full cost at a single point in time, a bank can raise capital in tranches — timed to market conditions, investor demand, and its own funding needs.
For I&M, that flexibility carries strategic weight. The bank operates across multiple East African markets and serves corporate clients, SMEs, and retail borrowers simultaneously. Drawing down capital as opportunities arise — rather than holding a large cash position waiting to be deployed — reduces the cost of funding and improves the return on each shilling raised.
What This Signals for Kenya’s Debt Market
Kenya’s corporate bond market has been relatively quiet compared to the equity market, but activity is building. More companies now treat the debt market as a serious alternative to syndicated bank loans, particularly as borrowing costs remain elevated and traditional credit lines tighten.
If I&M’s offer draws strong demand, it will validate the appetite that pension funds and institutional investors have signalled in recent years — and likely encourage more issuances before the year closes. The real test comes on allotment day. A heavily oversubscribed book would confirm that Kenya’s fixed income market can absorb large corporate raises at scale.
