Kenya’s government has announced a KSh194 billion loan through a Eurobond offering, with a fixed interest rate of 9.5%. The oversubscribed issuance will refinance existing debt, notably a KSh116 billion Eurobond maturing in 2027. Cabinet Secretary John Mbadi emphasized that this move aligns with the government’s debt management strategies and demonstrates strong investor confidence in Kenya’s economy.
The Government of Kenya, via the National Treasury, has announced the acquisition of a KSh194 billion loan as part of its debt management strategy. Treasury Cabinet Secretary John Mbadi announced this during a press briefing on February 27, indicating that the loan, garnered through a multi-billion-shilling Eurobond issuance, carries a fixed interest rate of 9.5% and is scheduled to be repaid in three installments in 2034, 2035, and 2036.
During the announcement, the finance minister highlighted that the Eurobond had seen an oversubscription of KSh646 billion from investors. He stated that the proceeds from this new issuance will primarily be directed towards servicing a KSh116 billion Eurobond which is due for maturity in 2027. These funds will facilitate the refinancing of existing external debt, specifically the planned buyback of Kenya’s KSh166 billion ($900 million) Eurobond set to mature in 2027.
Mbadi clarified that the final amount for the buyback would be determined by the demand observed in the ongoing Tender Offer, with results anticipated on March 3, 2025. He emphasized that the loan aligns with the government’s goal of improving the maturity profile of Kenya’s external debt while managing public debt liabilities proactively and effectively.
The Treasury CS further articulated that Kenya’s access to international capital markets illustrates the substantial investor confidence in the nation’s economic management. He lauded the strong collaboration between the government and investors, stating their commitment to maintaining prudent public debt management and underscoring its significance as a key pillar of the Bottom-Up Economic Transformation Agenda (BETA), championed by President William Ruto.
This recent transaction follows the successful repayment of a previous Eurobond by President Ruto’s administration in February of the previous year, executed four months ahead of its maturity. This earlier KSh324 billion Eurobond, issued in 2014 during former President Uhuru Kenyatta’s tenure, notably bolstered the local currency and enhanced investor confidence in the country’s monetary policies.
In summary, the Kenyan government has successfully acquired KSh194 billion through a newly issued Eurobond, demonstrating proactive debt management and investor confidence. The proceeds will be utilized to refinance existing debts, furthering the government’s economic strategies. This recent loan acquisition reinforces the commitment to prudent debt management, pivotal to Kenya’s economic transformation agenda.
Original Source: www.kenyans.co.ke
