Kenya returns to global markets for $500 million Eurobond buyback

The government has returned to global markets to fund a $500 million Eurobond buyback. The move is part of a strategy to ease short-term repayment pressure, lengthen the country’s debt maturity profile, and take advantage of improved investor sentiment in global markets.

The National Treasury is seeking to repurchase up to $500 million, or about KSh 64.5 billion, from two outstanding Eurobonds. The offer targets up to $350 million of the 8 per cent bond maturing in 2032 and up to $150 million of the 7.25 per cent bond due in 2028.

In a notice published on the London Stock Exchange, the government said it will pay a 5.5 percent premium for the 2032 bond, and a 3.5 percent premium for the 2028 bond. Investors will also receive accrued interest.

The buyback will close on February 25 and will be financed through a new dual-tranche dollar Eurobond, with maturities of seven and 12 years. The goal is to replace shorter-term debt with longer-dated debt, giving the country more time to repay what it owes.

This is Kenya’s fourth Eurobond buyback in just over two years and is part of a broader plan to better manage public debt and avoid heavy repayments falling due at once. The move comes as market conditions improve, supported by a recent credit rating upgrade from Moody's, which cited lower short-term default risk and stronger foreign exchange reserves.

Kenya now joins other African countries, including the Republic of Congo and Ivory Coast, in taking advantage of renewed investor appetite for emerging market debt.