Kenya takes Ksh.107.8 billion Eurobond

Kenya has raised Ksh.107.8 billion ($1 billion) from the international capital markets marking its fourth Eurobond issue in seven years.

The new Eurobond issue which follows a three-day virtual investor roadshow has a tenure of 12 years, meaning it will mature in 2034.

The bond was four times over-subscribed with investors putting in offers of Ksh.582.1 billion ($5.4 billion).

Treasury Cabinet Secretary Ukur Yatani says the high subscription rate by investors mirrors strong confidence in the Kenyan economy even as he expects the new funding to anchor the country’s pandemic response.

“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,” he said.

The pricing of the bond is expected to be completed later on Friday with sources indicating yields are likely to average around 6.3 per cent.

Proceeds from the bond are expected to be deployed in plugging financial needs for the remainder of the 2020/21 fiscal year which ends on June 30.

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

This is Kenya’s first Eurobond in just over two years. All previous three Eurobonds were taken during Henry Rotich’s tenure at the exchequer and totaled to Ksh.738.4 billion ($6.85)

Kenya’s first Eurobond, valued at Ksh.215.6 billion ($2 billion) and taken in June 2014 matures in 2024.