Kenya has successfully raised US$ 1.5 billion through a dual-tranche Eurobond issuance, its second major liability management operation in under two years. The transaction is designed to proactively manage its debt maturity profile and refinance near-term obligations.
The issuance comprises two equal tranches:
- •US$750 million of 7.875% Amortising Notes due 2033, issued at 98.30% of face value.
- •US$750 million of 8.80% Amortising Notes due 2038, issued at 97.134% of face value.
The Notes, which constitute direct, unconditional, and unsecured obligation have been admitted to the official list of the UK Financial Conduct Authority and to trading on the London Stock Exchange’s main market. Citigroup Global Markets Limited and The Standard Bank of South Africa Limited acted as joint bookrunners.
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Structured Amortisation and Use of Proceeds
A key feature of the new bonds is their amortising structure, which smooths the principal repayment burden.
- •The 2033 Notes will be redeemed in three equal instalments of US$ 250 million in October 2031, 2032, and 2033. The 2038 Notes will follow an identical pattern in October 2036, 2037, and 2038.
- •The net proceeds are intended primarily to finance the repurchase of Kenya’s US$ 1 billion 7.250% Notes due 2028, via a tender offer announced on 2 October 2025.
- •Any remaining funds will be allocated for general budgetary purposes, which may include the refinancing of other external indebtedness.
Economic Context and Fiscal Strategy
Kenya’s Eurobond comes amid signs of macroeconomic stabilization.
- •According to the Offering Circular, the fiscal deficit was contained to 5.8% of GDP in FY 2024/25, with a target to reduce it further to 4.8% in FY 2025/26.
- •Inflation has decelerated significantly, falling to 3.0% in December 2024, well within the Central Bank of Kenya’s target range of 2.5–7.5%.
- •The economy remains resilient, with real GDP growing 4.9% in the first quarter of 2025, driven by robust performance in agriculture, transportation, and financial services.
- •Public and publicly guaranteed debt stood at approximately KES 11.8 trillion (US$81.7 billion) as of June 2025, representing 66% of GDP.
The government’s strategy, outlined in its Bottom-Up Economic Transformation Agenda (BETA) and supported by an IMF programme, focuses on fiscal consolidation, enhancing revenue collection, and strategic investments in priority sectors.
Reinforcing Market Access and Legal Framework
This transaction extends Kenya’s average external debt maturity and demonstrates its continued, albeit costly, access to international capital markets. It follows a US$1.5 billion bond issuance in February 2024 used to buy back portions of its 2024 and 2027 Eurobonds.
The Notes are governed by English law, and the Republic has agreed to resolve any disputes through arbitration under the rules of the London Court of International Arbitration, having waived certain sovereign immunities for this purpose. The bonds carry expected ratings of B from S&P Global Ratings and B- from Fitch.
By securing funding at coupons below 9%, Kenya has achieved a competitive pricing outcome among frontier market issuers, signaling a degree of restored investor confidence as it navigates its ongoing fiscal consolidation and debt management path.
