Treasury woos UK, American investors for new Eurobond


The National Treasury building in Nairobi. FILE PHOTO | NMG

Kenyan officials were set to start meeting investors in London and the United States on Thursday as it markets a 12- and 31-year dual-tranche Eurobond, a lead arranger for the issue said.

The Treasury, which made its international capital markets debut in the summer of 2014, has mandated J.P. Morgan and Standard Chartered to lead the new Eurobond issue, said the lead arranger in a statement seen by Reuters on Thursday.

Kenya returned for a 10- and 30-year dual-tranche bond in early 2018 before starting talks with lenders early this year on the issuance of a further $2.5 billion worth of bonds.

Some of the funds raised from the new issue will be used to refinance a maturing five-year dollar-denominated bond that was issued in June 2014, Henry Rotich, the Treasury Cabinet Secretary, told reporters last month.

Officials at the Treasury did not respond immediately when Reuters sought comment. The new bond will be listed on the Irish and London stock exchanges, the lead arranger said.

Kenya plans to borrow a net of Sh321 billion from external lenders in the fiscal year ending June 2019, the Treasury documents show. The government took new $1.25 billion (Sh125billion) medium-term syndicated loans between January and March to retire maturing short-term foreign loans, officials revealed last month, in a move aimed at easing debt repayment pressures on the exchequer.

The Treasury said it took out $250 million (Sh25.33 billion) to pay off a short-term loan that was due in January and another $1 billion (Sh99.73 billion under the then prevailing exchange rate) in March to repay a two-year $760 million syndicated loan procured in 2017.

The facilities were arranged by regional lender Trade and Development Bank (formerly PTA) and South Africa’s largest lender by assets, Standard Bank Group Ltd.

Debt repayments to foreign creditors in the current year ending in June is estimated at nearly Sh364.66 billion of the Sh870.62 billion that the Treasury plans to spend on debt servicing, according to Medium Term Debt Management Strategy for 2018-2022.