The Treasury is finalising the picking of lead arrangers for Kenya's new Eurobond.
The government had planned to onboard lead arrangers for the planned issuance by the end of July as a signal to the market given the $2.0 billion (Sh286.3 billion) Eurobond maturity due in June 2024.
“We are at the tail end of the procurement process and will issue final results as soon as the relevant timelines are finalised,” a top official at the National Treasury told the Business Daily.
The banks shortlisted for consideration as lead arrangers for the planned issuance are JP Morgan, Citigroup, Standard Bank and Standard Chartered Bank.
In July, a delegation of seven from the government including Treasury Principal Secretary Chris Kiptoo; public private partnerships director-general Chris Kirigua; and Planning Principal Secretary James Muhati met a group of bond investors in London and floated various options being considered by the government in view of the large ticket maturity falling due in June 2024.
The delegation canvassed a number of options for settlement of the maturing Sh286.3 billion bond including part buyback and part repayment of the maturing Eurobond that would imply the government repurchases half the maturing Eurobond as indicated by President William Ruto while retiring the remaining half using the proceeds raised from the fresh Eurobond.
“Options mooted by the government of Kenya include full repayment with multi-tranche bonds; part buy-back and part repayment with multi-tranche Eurobonds; and part swap part repayment with multi-tranche Eurobonds. Finer details and strategy shall be agreed by lead arrangers,” the Treasury told bond investors in London in the July meeting.
The government has also floated the consideration of floating a Shariah-compliant bond— Sukuk— as well as floating a bond denominated in a currency other than the US dollar as a way to cushion the economy from the foreign exchange pressure created by the strengthening greenback.
Syndicated loan
“Refinancing major portions of the Eurobond using one or a combination of syndicated loan proceeds or bilateral commercial loan proceeds. Additional possible options include the issuance of a Sukuk following Egypt’s (B+/B2) successful issuance in February 2023 or issuance of a Samurai bond,” the Treasury told bond investors in London in the July meeting.
