VOTE OF CONFIDENCE

Kenya's fourth Eurobond oversubscribed, nets Sh108 billion

Investors 'responded well' to measures to lift economy from Covid blues

In Summary

• Kenya went for the first Eurobond in 2014 worth $2 billion which was followed with two more issues of $2.1 billion and $2 billion in 2018 and 2019 respectively.

• A huge chunk of those sovereign bond were used to settle maturing debt.

National Treasury CS Ukur Yatani.
National Treasury CS Ukur Yatani.
Image: TREASURY

Kenya has raised USD1 billion (108 billion) debt in a new Eurobond that was oversubscribed by five fold.

Making the announcement, Treasury CS Ukur Yatani attributed the oversubscription to strong global investor confidence on Kenya’s economy and medium-term economic prospects.

''In particular, measures being taken to mitigate the effects of the pandemic to the economy were well received by investors,'' Yatani said on Thursday.

He added that the overwhelming response from global investors reflects the market’s continued confidence in Kenya’s Economic Recovery Programme supported by the IMF and is in line with our Medium-Term Debt Management Strategy approved by Parliament.

''We want to thank investors for their strong participation in the bond issuance”, he said.

Although the exchequer was silent on the tenure and interests the country's fourth Eurobond has attracted, sources close to the deal reveals that it is a 12 year loan and attracts an interest of 6.3 per cent

Harun Sirima, the director-general of the Public Debt Management Office, emphasized the need for a cautious approach in contracting commercial borrowing to ensure the country’s debt profile remains within a sustainable path.

“We went to the market seeking to raise $1 billion and stuck to the discipline of our target amount despite the oversubscription and competitive pricing,'' Sirma said.

He added that going forward, they are optimistic that Kenya will successfully execute liability management operations in the next fiscal year in line with the debt strategy of lowering cost and minimizing risks in the public debt portfolio.

Kenya went for the first Eurobond in 2014 worth $2 billion which was followed with two more issues of $2.1 billion and $2 billion in 2018 and 2019 respectively.

A huge chunk of those sovereign bond were used to settle maturing debt.