Kenya issues yet another Sh210bn Eurobond

May 16, 2019 (2 weeks ago)
In a statement, the Treasury Cabinet Secretary Henry Rotich stated that the proceeds from this issuance will also be used to finance some of the development infrastructure projects/FILE

, NAIROBI, Kenya, May 16 – Kenya has issued another Sh210 billion Eurobond that will be used to finance the budget and repay an earlier acquired bond.

In a statement, the Treasury Cabinet Secretary Henry Rotich stated that the proceeds from this issuance will also be used to finance some of the development infrastructure projects.

“The Government of Kenya, acting through the National Treasury and Planning, has successfully priced a new $2.1 billion, dual-tranche Eurobond of 7-year and 12-year tenors on 15th May 2019 in London, United Kingdom,” he said.

He further pointed out that it was also be used to reduce the obligation in the Sh75billion bond acquired in 2014, which is due to mature in June.

“This is the third time Kenya has been in the International Debt Capital Markets. The first was in June 2014, when we launched the debut bond of US dollar 2.0 billion and tapped for a further US dollar 750 million, while the second was in February 2018 when a dual-tranche of US$ 2.0 billion was issued (10-year tenor of US$ 1.0 billion and 30-year tenor of US$ 1.0 billion),” Rotich stated.

Rotich explained that the issuance of the bond followed extensive engagements and consultations with over 100 investors in the United States of America.

He said that the announcement of the issuance triggered an overwhelming response from investors that amounted to an order book of US$ 9.5 billion which is an over subscription of 4.5 times.

“This was distributed as follows: US$ 4.0 billion in the 7-year tenor and US$ 5.5 billion in the 12-year tenor. This overwhelming interest in Kenya’s bond issue confirms the strong investor confidence in Kenya’s economic policy management and prospects going forward,” he stated.

According to Rotich, investors welcomed the planned reforms by Government to enhance revenue collection and reduce non-priority expenditures that would reduce fiscal deficits and were happy that this would stabilize debt.

He stated that they appreciated that Kenya’s debt remains sustainable and commended the Government for this outcome.

This is the third Eurobond issued in five years amidst the rising concern over the government’s ability to service its debt burden.

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