Capital Markets

Eurobond III begins trading on Irish bourse

Treasury building
Treasury building in Nairobi. The government says it wants to use proceeds of the latest issuance to retire the debut bond and finance infrastructure projects, among others. FILE PHOTO | NMG 

Kenya’s third Eurobond valued at Sh210 billion ($2.1 billion) was Wednesday admitted for trading at the Irish Stock Exchange.

A notice of admission was posted on the Irish Stock Exchange, giving green light for the bond to start trading in the secondary market.

The Eurobond was sold in two tranches of seven and 12 years, with JP Morgan and Standard Chartered bank the lead arrangers.

“Euronext Dublin approves the admission of undermentioned securities to listing on the official list and trading on the regulated market of Euronext Dublin,” read the notice.

Stabilisation period for the Eurobond III will run until June 15, within which the lead arrangers will have to keep the price of the new bond at or above the offering price on the secondary market.


Previous issues have also traded in the market.

The country sold its debut $2.75 billion (Sh275 billion) bond in June 2014 that was issued in two tranches of five years (Sh75 billion) and 10-years (Sh2 billion).

In February last year, the Treasury floated its second bond, raising $2 billion (Sh200 billion) in two equal tranches of Sh100 billion in 10- and 30-year tenors.

Yields on all the previous Eurobonds have fallen, according to Central Bank of Kenya data.

The biggest change since the beginning of the year is on the 10-year paper due in 2024 that declined by 1.99 percentage points to stand at 6.38 per cent as at May 16.

The other 10-year paper due in 2028 has fallen by 1.64 percentage points to stand at 7.45 percent. Lower yields indicate smaller sovereign risk rating, a factor that also emerged with the huge demand for the latest bond.

The five-year Eurobond issued last year has gone downwards by 0.12 percentage points to 5.63 percent while the yield on the 30-year paper is at 8.446 percent, 1.42 percentage points down.

The Treasury said it wants to use proceeds of the latest issuance to retire the $750 million debut bond, finance infrastructure projects, offer general support to budget and potentially pay off other debt obligations.

The Treasury is expected to continue picking debt a low yields thanks to the new Eurobond cash.