THIRD EUROBOND

Kenya borrows Sh210 billion in new Eurobond to pay first one

In Summary

• The bond has been priced at seven per cent for the 7-year issue and eight per cent for the 12-year trench.

• This is the third time Kenya has been in the International Debt Capital Markets.

State Department of Planning PS Julius Muia and National Treasury CS Henry Rotich during the launch of 2019 KNBS economic survey in Nairobi on April 25,2019.
ECONOMIC POLICY State Department of Planning PS Julius Muia and National Treasury CS Henry Rotich during the launch of 2019 KNBS economic survey in Nairobi on April 25,2019.
Image: ENOS TECHE

Kenya has raised $2.1 billion Sh210 (billion) in the new Eurobond that will be repaid in two tranches of 7-year and 12-year tenors, in an issue that was oversubscribed 4.5 times.

According to Treasury CS Henry Rotich, the bond has been priced at seven per cent for the 7-year issue and eight per cent for the 12-year trench, below the initial interests of 7.5 and 8.5 per cent respectively.

The loan will be used to finance some unspecified development infrastructure projects, support expenditure budget and to refinance the $750 million (Sh75 billion) of the first Euro-bond issued in 2014 which is due on June 24.

Both the 7-year and the 12-year tenors will be amortized equally, at $300 million (Sh30 billion) and $400 million (Sh40 billion), respectively, per year in the last three years to maturity in order to avoid a spike in repayments.

This is the third time Kenya has been in the International Debt Capital Markets.

The first was in June 2014, when it launched the debut bond of Sh200 billion and tapped for a further $750 million, while the second was in February 2018 when a dual-tranche of Sh200 billion was issued (10-year tenor of Sh100 billion and 30-year tenor of a similar amount.

The new Eurobond stretches further the country’s public debt to at least Sh5.5 trillion.

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