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Kenya secures new $1.5 billion (Sh234 B) Eurobond due in 2031

Treasury CS Njuguna Ndung'u has announced the successful pricing of a $1.5 billion Eurobond, a pivotal step in the nation's debt management strategy.

Cabinet Secretary for National Treasury and Economic Planning, Prof Njuguna Ndungu

This new issuance, with a 9.75% interest rate and maturing in 2031, marks a significant achievement in Kenya's economic planning and international finance engagement.

The 2031 Eurobond, will be paid in three equal instalments in the years 2029, 2030, and 2031.

This issuance attracted a robust demand from investors, with the order book exceeding $6 billion, allowing Kenya to secure tighter pricing and increase the issuance volume beyond the initial guidance.

The proceeds from this Eurobond are earmarked for a buyback of Kenya's existing $2 billion Eurobonds due in 2024, pending demand in the Tender Offer, with results expected by February 15, 2024.

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This strategic refinancing is part of a broader government initiative to smooth the maturity profile of its debt and proactively manage its fiscal liabilities.

The portion of the 2024 Eurobond that isn't repurchased will be retired through a mix of syndicated financing, multilaterals financing & domestic financing

This diversified approach to financing is designed to maintain a relatively low weighted average interest rate across Kenya's public debt portfolio, ensuring the nation's debt sustainability over the medium term.

The successful issuance of the Eurobond is a testament to the international capital markets' confidence in Kenya's economy and its government's debt management strategies.

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It underscores the importance of such markets in providing the liquidity necessary for the government to meet its financial obligations and invest in the country's growth and development.

This achievement is in line with President William Ruto's administration's commitment to sound financial management and proactive debt management.

The government's successful engagement in international capital markets and its strategic financial planning efforts highlight its dedication to maintaining fiscal discipline and ensuring the economic stability of the country.

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The government extended its gratitude to its international partners and investors for their continued trust and partnership, reaffirming its commitment to prudent debt management and fiscal responsibility.

This Eurobond issuance not only strengthens Kenya's financial position but also sets a positive trajectory for the country's economic future.

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