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National Treasury & Planning CS Amb Ukur Yatani has called on investment professionals to diversify their portfolios by tapping into public sector asset classes / COURTESY

Finance

Kenya raises Sh107.8bn in oversubscribed Eurobond

NAIROBI, Kenya, Jun 18 – Kenya has raised US$1 billion equivalent to Sh107.8 billion through the issuance of a 12-year Eurobond in the international financial markets.

In a statement, National Treasury Cabinet Secretary Ukur Yatani said the new bond issue, which was Kenya’s first new Eurobond issued in two years, was over-subscribed with over USD5.4 billion offered by investors.

Yatani noted that the oversubscription was a sign of strong global investor confidence in Kenya’s economy and medium-term economic prospects.

The CS added that measures being taken by the government to mitigate the effects of the pandemic on the economy, in particular, were well received by investors.

“The overwhelming response from global investors, reflects the market’s continued confidence in Kenya’s Economic Recovery Programme 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”, he noted.

Commenting on the same, Dr. Harun Sirima, the Director-General of the Public Debt Management Office, emphasized the need for a cautious approach in contracting commercial borrowing to ensure the country’s debt profile remains within a sustainable path.

“We went to the market seeking to raise US$ 1 billion and stuck to the discipline of our target amount despite the oversubscription and competitive pricing. Going forward we are optimistic that Kenya will successfully execute liability management operations in the next fiscal year in line with the debt strategy of lowering cost and minimizing risks in the public debt portfolio”.

Michael Mutiga, Managing Director & Corporate Finance Head for SubSaharan Africa at Citi, expressed appreciation on behalf of the Joint Lead Managers, Citi and JP Morgan, as well as the Co-Lead Managers, NCBA and I&M banks: “We thank the Government of Kenya for entrusting us as a consortium through this process, it has been a robust book and diverse response from investors comprising local, regional and global investors, reflecting strong confidence in Kenya’s economic narrative. The terms attained have been competitive given the global economic backdrop and reflects continued strong investor interest in new issues from the continent”.

The CS led the government delegation for the virtual Eurobond Roadshow. He was joined by Central Bank of Kenya Governor, Dr. Patrick Njoroge and senior National Treasury officials led by Principal Secretary Dr. Julius Muia.

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They were assisted by representatives from the Joint Lead Managers, Citi and JP Morgan and Co-Lead Managers, NCBA and I&M banks.

The Eurobond matures on January 23, 2034 and will be repaid in two equal installments on January 23, 2033 and 2034.

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