By Michelle Ndaga
East African Breweries Ltd (EABL) announced that it will redeem its Sh11 billion corporate bond at the end of this month a full year ahead of its scheduled maturity date of October 29, 2026.
According to the company’s Chief Financial Officer, Risper Ohaga, the early redemption move is intended to reduce financing costs, ease liquidity pressures, and improve the firm’s debt profile. EABL says the redemption will be funded through a combination of existing financial arrangements and short-term bridge financing, though the exact mix and sources have not been disclosed.
The bond carries a fixed interest rate of 12.25 percent, which has translated into roughly Sh1.34 billion in annual interest expenses since its issuance in October 2021.
By paying off the bond early, EABL avoids the need to reclassify it as a current liability a move that would have strained its liquidity metrics. The brewer’s current ratio (current assets to current liabilities) stood at 1.11 times as of June 2025, just above the regulatory minimum.
EABL plans to draw from bank borrowings for much of the funding, citing recent declines in borrowing costs. The firm has access to lines priced at prevailing 182-day Treasury bill rates plus a small premium, which now compares favorably to the fixed rate on the bond.
Over recent periods, EABL has been actively managing its leverage. Its total borrowings declined from Sh41.4 billion in 2024 to Sh34.8 billion by June 2025. The original bond issue was intended to fund working capital and to repay existing debt.
Analysts note that the redemption also comes at a critical time for Kenya’s corporate bond market, which has seen contraction following defaults and fraud losses in past years. As one of the few highly rated issuers remaining, EABL’s action could influence sentiment among institutional and retail investors.
