Kenya raised US$1.5 billion from international investors through an 11-year Eurobond to refinance its external debt including the US$900 million Eurobond due in 2027, with an instalment due in May 2025.
- •The 9.5% coupon rate bond, maturing in 2036, received strong demand with investors bidding US$4.9 billion owing to the attractive interest rates.
- •Earlier, the country launched a buyback offer for its US$900 million Eurobond due in May 2027 whose results will be up on 3rd March 2025 depending on demand.
- •The 2036 paper will be amortized in three equal installments in 2034, 2035 and 2036 with a 10-year weighted average.
The National Treasury in a statement said the oversubscription reflects strong investor confidence in the country. The proceeds from the issue will refinance the US$ 900 million Eurobond maturing in 2027, with the remaining amount used to finance general budgetary expenditures and other external debt.
“Proceeds from the 2036 Eurobond will be used to refinance existing external debt including the planned buyback of Kenya’s US$ 900 million Eurobond maturing in 2027,” Treasury said in statement.
The total amount of notes to be purchased will be determined at Kenya’s discretion following the pricing. “The final amount for the buyback will be determined based on demand in the ongoing Tender Offer.”
In 2024, Kenya issued a US$1.5 billion Eurobond due in 2031 which the Treasury Cabinet secretary John Mbadi says, “aligns with the Government’s strategy to smoothen the maturity profile of Kenya’s external debt and proactively manage public debt liabilities.”
Kenya reduced its chances of defaulting on the $2 billion debt, easing investors’ jitters about the settlement of the Eurobond with some projecting liquidity and debt crisis.
After the US$1.5 billion partial buyback in the same month, the shilling turned bullish, mirroring restored market confidence. The surprise issuance contradicted previous expectations that Kenya’s National Treasury would fund the buyback with foreign reserves or loans from multilateral lenders.
