Treasury Cabinet Secretary Henry Rotich says the country reopened the sovereign bond seeking to raise the cash ($750 million) from international investors.
Rotich said the issue compromised a bond for Sh22.2 billion ($250 million) with a five year maturity at an interest rate of five percent and another for Sh45.1 billion ($500 million) with another 10 year maturity at an interest rate of 5.9 percent.
The bond was oversubscribed by 300 percent with a total demand amounting to Sh270.8 billion ($3billion) compared to the needed Sh67 million ($750 million) and proceeds were received in Kenya’s accounts on December 3, 2014.
Rotich says the reopening has increased the size of the existing bond to Sh248 billion ($2.75 billion) from the Sh180 billion ($2 billion).
“During the pricing, we chose an appropriate deal size of Sh67 billion as per our original plans. I am pleased to report that the bond is performing well in the secondary market in the Irish Stock Exchange with good liquidity and trading platform,” he said.
The Sh22.2 billion bond was held by United States investors at 33 percent, United Kingdom at 33 percent and then other Europe at 34 percent with fund managers holding 70 percent of the issue while banks and insurance/ pension funds held 6 percent.
The Sh45.1 billion bond was held by UK investors at 50 percent, followed by USA at 37 percent, the rest of the investors from other regions held bonds of about 13 percent. Fund managers held 83 percent of this Note issue while banks and pension/Insurance funds held 2 percent of the note issue.
“The government will apply proceeds to fund infrastructure projects including but not limited to energy, transport and agriculture sectors, the outstanding success of the issue offering was driven by Kenya’s great credit story and macroeconomic management, ” he explained.
He says the oversubscription is a clear indication of investors’ confidence in the country amidst increasing insecurity.
In June, Kenya successfully issued the Sh180 billion Eurobond which received 500 percent oversubscription.