Kenya has successfully secured a new Eurobond in a deal arranged by Citi and Standard Bank on behalf of the National Treasury. The new issue is valued at US$1.5 billion (Ksh 193 billion).
This new issuance demonstrates the Kenyan government’s commitment to strategically managing its debt repayment schedule and ensuring sustainable debt service. A significant proportion of the bond, US$579 million, will be used to buy back part of any existing Eurobond that is maturing in 2027, significantly reducing pressure on the government’s medium-term debt obligations.
The new bond, which closed on March 5, has a maturity of 10.5 years, with the principal amortizing in three equal installments in the final three years, reaching full settlement by 2036. The bond is priced at a 9.95% yield with a 9.5% coupon rate.
The Eurobond attracted strong investor demand, reflecting confidence and strong support for the country’s proactive approach to debt management. The tender’s participation rate stood at 64%, which indicates Kenya’s renewed credibility in global markets. With the strong demand, the government was able to secure better pricing terms and increase the bond size beyond initial expectations.
“This transaction is a testament to the strength of Citi’s global brand as a trusted advisor and partner to sovereigns in helping them access global capital markets. It is also a reflection of Citi’s longstanding commitment to supporting the government of Kenya in achieving its economic transformation agenda and development objectives,” stated Martin Mugambi, Citibank Kenya Managing Director and CEO.
“We are proud to have facilitated Kenya’s Eurobond, reflecting strong investor confidence. This successful transaction reaffirms the country’s market access and growth potential,” said Dr. Joshua Oigara, Chief Executive of Stanbic Bank in Kenya and South Sudan.
This successful Eurobond issuance comes at a time when Kenya is focused on balancing development spending with sustainable borrowing. The government aims to reduce external debt costs and smoothen its maturity profile.
