Kenya to start meeting investors in debut Eurobond issuance

Kenya pushed ahead with the sale of its first Eurobond, appointing banks to market the deal in the US and Europe as it bets a spate of bombings won’t deter investors from East Africa’s biggest economy.

Barclays Plc, JPMorgan Chase & Co., Standard Bank Group Ltd. and QNB Capital will organize investor meetings in San Francisco, Los Angeles, Boston, New York and London from tomorrow until June 15, according to a person familiar with the deal. A benchmark dollar offering may follow, said the person, who asked not to be identified because they’re not authorized to speak about it.

Kenya is entering global bond markets after record Africa sales in 2013, including a first-time sale by Rwanda and offers by Nigeria and Ghana.

African dollar notes returned 8.3 per cent this year, compared with 8 per cent for emerging markets, according to JPMorgan Chase & Co. indexes. Nairobi was rocked by two attacks last month in which at least 15 people died, while four were killed in two explosions in the port city of Mombasa.

“It’s a good time for Kenya to be issuing, because demand for African debt remains healthy in general and yields are close to recent historical lows,” Richard Segal, head of international credit strategy at Jefferies International Ltd. in London, said in an e-mailed reply to questions today.

The yield on 10-year shilling debt was little changed at 12.2 per cent as of 12:48 p.m. in Nairobi, within six basis points of a record high reached last month following twin explosions that killed at least 12 people in the capital on May 16. The shilling gained a third day in the longest rally since February 20th, advancing 0.2 per cent to 87.40 per dollar.

Zambia, which shares Kenya’s B1 rating at Moody’s Investors Service, paid 8.5 per cent when it sold $1 billion of Eurobonds last month. The yield has since dropped to 7.46 per cent.

Visitor arrivals fell by almost a fifth last year amid bombings including an assault by the Somali Islamist militant group Al-Shabaab on the Westgate mall in Nairobi that left at least 67 dead.

Tourism is Kenya’s biggest source of foreign exchange after tea exports.