Kenya is seeking to retire up to US$ 500Mn (KSh 64.5Bn) of outstanding Eurobonds at premium prices, targeting its 7.25% notes due 2028 and 8.0% amortizing notes due 2032.
- •The move comes as the government prepares a fresh US dollar bond issuance, according to filings published by the London Stock Exchange.
- •The move comes amid sustained pressure on Kenya’s refinancing profile, with the next significant sovereign maturity in February 2028 and a growing commercial debt burden.
- •Kenya has pursued similar liability-management actions over recent years, often pairing buybacks with fresh issuance to ease refinancing bottlenecks.
Officials framed the operation as proactive management of Kenya’s external debt, designed to smooth near-term refinancing pressure and reduce medium-term amortization obligations. The cancellation of accepted bonds, with no re-issuance, is intended to lower outstanding commercial debt and improve the maturity profile.
Traders indicate that Kenyan Eurobond yields have tightened recently as credit spreads narrowed and investor risk appetite improved, but remain elevated relative to investment-grade peers, underscoring the cost of accessing international capital.
A recent rating action and improved foreign-exchange reserve metrics have supported secondary-market performance, with 2032 notes trading below coupon levels and offering a signal that fresh issuance could attract demand at competitive pricing.
Under the tender terms, Kenya has invited holders to offer up to US$350M (KSh 45.2B) of the 2032 notes and US$150M (KSh 19.4B) of the 2028 notes. The 2032 notes carry a combined outstanding principal of US$1.20B, while the 2028 line stands at US$371.6M, bringing total bonds in scope to about US$1.6B (KSh 202.7B). For notes accepted, Kenya will pay US$1,055 per US$1,000 of 2032 principal and US$1,035 per US$1,000 for 2028 paper, equal to 105.50% and 103.50% of face value respectively, plus accrued interest.
The tender is conditional on the successful placement of the new US dollar issue or alternative acceptable financing. Kenya emphasizes that acceptance remains at its full discretion even if financing conditions are met. Investors who participate by tendering their existing bonds will be given priority consideration in allocations of the new issue, though allocations are not guaranteed.
Participation is restricted to institutional holders, with a minimum tender size of US$200,000. If valid tenders exceed the caps, acceptance will be executed on a pro-rata basis. The offer window closes at 5:00pm New York time on February 25, with results expected on February 26 and settlement targeted for March 3.
The tender and linked issuance come as Kenya navigates elevated debt service costs and fiscal constraints, making it a critical test of investor confidence and sovereign financing conditions in 2026.
| Key item | Details |
|---|---|
| Tender size | US$500M (KSh 64.5B) |
| Bonds targeted | 7.25% notes due 2028 and 8.00% amortising notes due 2032 |
| Buyback cap, 2028 | US$150M (KSh 19.4B) |
| Buyback cap, 2032 | US$350M (KSh 45.2B) |
| Total bonds in scope | US$1.6B (KSh 202.7B) |
| Purchase price, 2028 | 103.50% of face value plus accrued interest |
| Purchase price, 2032 | 105.50% of face value plus accrued interest |
| Financing condition | Subject to successful new US dollar bond issue |
| Investor incentive | Priority allocation in new bond issue |
| Minimum tender size | US$200,000, institutional investors only |
| Proration | Applies if tenders exceed caps |
| Offer close | 25 Feb 2026, 5:00pm New York |
| Results date | 26 Feb 2026 |
| Expected settlement | 3 Mar 2026 |
| Treatment of bonds | Cancelled and permanently retired |
