Kenya raises Ksh.290 billion in new Eurobond

Kenya has returned to the global markets to seek USD 2.25 billion (Ksh.290 billion) to buy back older debt and meet budgetary needs.

The National Treasury now says that the country has achieved successful pricing of the new Eurobond, in two tranches.

The first is USD 900 million (Ksh.116 billion) at an interest rate of 7.8 percent, maturing in 2034. This first tranche will be repaid in three equal installments between 2032 and 2034, giving it an average life of seven years.

The second tranche is USD 1.35 billion (Ksh.174 billion) at 8.7 percent, maturing in 2039. It will also be repaid in three equal installments between 2037 and 2039, with an average life of 12 years.

Treasury says demand from investors was strong, with orders exceeding the amount on offer.

The funds raised will partly finance the ongoing buyback of Kenya’s older Eurobonds: up to USD 150 million of the 2028 bond and up to USD 350 million of the 2032 bond, including accrued interest.

Any remaining proceeds will go toward general budget support. The results of the buyback are expected on February 26th.

Treasury says the transaction is part of a broader plan to spread out Kenya’s debt repayments over a longer period, reducing the risk of large amounts falling due at once.

The successful issue also follows a recent credit rating upgrade by Moody's, which cited lower default risk, stronger foreign exchange reserves and improved external balances.