Kenya has successfully raised $1.5 billion through an 11-year Eurobond with a 9.5% coupon rate, maturing in 2036, to refinance its external debt, including a $900 million Eurobond due in 2027. The bond issuance, which was oversubscribed with investor bids reaching $4.9 billion, reflects strong confidence in Kenya's financial stability. The proceeds will primarily refinance the 2027 Eurobond, with the remainder allocated for general budgetary expenditures and other external debt obligations. The 2036 Eurobond will be amortized in three equal installments in 2034, 2035, and 2036, with a 10-year weighted average.
Kenya also launched a buyback offer for its $900 million Eurobond due in 2027, with results expected by March 3, 2025, depending on demand. Treasury Cabinet Secretary John Mbadi emphasized that this move aligns with the government's strategy to manage public debt liabilities and smooth the maturity profile of Kenya's external debt. The successful issuance has reduced the risk of default on the $2 billion debt, easing investor concerns about liquidity and debt crisis.
Bloomberg reported that Kenya plans to use the $1.5 billion Eurobond proceeds to re-arrange state debt by swapping out shorter-dated securities and repaying syndicated loans. Mbadi stated that after buying back the 2027 Eurobond, the remaining funds will be used to retire "expensive" syndicated loans due later this year, ensuring the money is not spent on budget support. This strategic financial management has restored market confidence, as evidenced by the bullish performance of the Kenyan shilling following the partial buyback.
