Kenya Raises $1Bn in Eurobond Sale, Fourth Sovereign Loan Since 2014

Kenya's total receipts for the August period of the current fiscal surged 34 per cent, to Ksh 125.3 billion compared to Ksh 93.5 billion similar period in FY 2020/21.

Kenya has raised one billion Euro (Ksh 107.9 billion equivalent) Eurobond issuance as part of its plans to bolster its liquidity.

The dollar-denominated bond has had an interest rate of 6.3 per cent for a 12-year tenure, marking its fourth sovereign loan since 2014. 

Citi and JP Morgan had been appointed as joint book-runners for the dollar-denominated sovereign bond issue, and I&M Bank and NCBA Group as co-managers, Refinitiv’s capital markets news service IFR said on Tuesday. 

The Eurobond issue will mature on 23 June 2034 with the principal repayment made in two equal instalments on 23 June 2033 and 2034.

According to the Treasury, the bond was four times over-subscribed with investors putting in offers of Ksh 582.1 billion signifying strong confidence in the country’s economy amidst the coronavirus pandemic.

“The overwhelming response from global investors reflects the market’s continued confidence in Kenya’s Economic Recovery Program supported by the IMF and is in line with our Medium-Term Debt Management Strategy approved by Parliament. We want to thank investors for their strong participation in the bond issuance,” Treasury Cabinet Secretary Ukur Yatani said. 

The pricing of the new Eurobond expected to be completed later on Friday with projections that yields are likely to average 6.3 per cent. 

Proceeds from the bond are aimed for budgetary support for the 2020/21 fiscal year which ends on June 30.

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The IMF Executive Board is scheduled to meet next week on Wednesday (23rd June 2021) and approve USD 410.Mn (Ksh 44.2 billion equivalent) disbursement following the conclusion of the first review of the 38-month Extended Fund Facility/Extended Credit Facility program last month.

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