Treasury Cabinet Secretary Henry Rotich had earlier indicated a dateline of late January or early February for the road shows. FILE
What you need to know:
The dateline indicates a delay from the late January or early February deadline as indicated by Treasury Secretary Henry Rotich.
Arrangers of Kenya’s anticipated sovereign bond are expected to start selling it to investors in road shows beginning mid next month, a source close to the transaction advisers has indicated.
The dateline indicates a delay from the late January or early February deadline as indicated by Treasury Secretary Henry Rotich.
“The roadshows (are) scheduled for mid-February,” said the source who could not be named as he is not authorised to speak to the Press.
The Treasury has plans to issue a Sh172 billion Eurobond (between $1.5 billion and $2 billion) to partly finance a Sh330 billion deficit in the national budget.
The Reuters news agency last week reported that the roadshows would be pushed beyond their scheduled date of January 20. Roadshows are meetings across the globe set up by arrangers of bond issues with potential investors to gauge appetite for the securities.
A week ago, Mr Rotich said the Treasury was preparing key documents for the offer, including an offering circular — a summary prospectus for a new security normally delivered to individuals and brokerage houses in order to arouse interest from potential investors.
The World Bank and analysts have warned that Kenya could pay higher interest rates for the bond if the US Federal Reserve Bank goes ahead to cut back its loose monetary policy, which has been a source of cheap cash globally.
The Treasury is, however, taking comfort in the recent discovery of oil reserves in the country and their confirmed commercial viability to boost its credit worthiness and cut risk premium by investors.
Kenya’s political risk is seen to have improved with the peaceful conclusion of the General Elections.
Cases at the International Criminal Court against President Uhuru Kenyatta and his deputy William Ruto are also seen to be less of a concern to investors than they were say a year ago.
Kenya is rated B+ with a stable outlook by Standard and Poors, Moody’s has given it a B1 rating while rating agency Fitch ranks it B+.
As at October last year the country’s total debt was at Sh2 trillion, 56.4 per cent of the GDP.
Besides financing projects, the loan is also expected to pay off some of the syndicated loan taken up by the government two years ago and shore up Central Bank’s foreign exchange reserves that currently stand at about $6 billion.
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