Kenya Secures New KSh194 Billion Eurobond for Debt Management
The Kenyan government has announced a KSh194 billion Eurobond loan with a fixed interest rate of 9.5%, to be repaid in installments due in 2034-2036. This loan seeks to refinance an existing Eurobond, and has received significant oversubscription from investors. Treasury Cabinet Secretary John Mbadi highlighted its strategic importance for managing public debt and enhancing investor confidence in Kenya’s economy.
The Kenyan government has officially announced the acquisition of a new loan amounting to KSh194 billion as part of its debt management strategy. Treasury Cabinet Secretary John Mbadi provided details regarding the loan, which features a fixed interest rate of 9.5 percent and is scheduled to be repaid in three installments in 2034, 2035, and 2036.
During a press briefing on February 27, 2025, Mr. Mbadi highlighted that the loan was secured through a Eurobond issuance. He noted that the offering experienced an oversubscription from investors, amounting to KSh646 billion. The funds raised from this Eurobond are intended to refinance an existing Eurobond worth KSh116 billion, which is due to mature in 2027.
Furthermore, CS Mbadi stated that the proceeds will also be utilized for the planned buyback of another Eurobond worth KSh166 billion, which is set to mature in 2027. The final amount for the buyback will depend on investor demand in an ongoing Tender Offer, with results to be announced on March 3, 2025.
The acquisition of this loan aligns with the government’s initiative to improve the maturity profile of Kenya’s external debt while effectively managing public liabilities. Mbadi emphasized the country’s strong access to international capital markets, which reflects investor confidence in Kenya’s economic management.
He praised the collaboration between the government and its investors, stressing their commitment to sound public debt management. Moreover, he noted that effective public debt management is a cornerstone of the Bottom-Up Economic Transformation Agenda (BETA), championed by President William Ruto.
This Eurobond transaction follows the successful repayment of a prior Eurobond in February 2024, which occurred four months ahead of its maturity date. The previously issued KSh324 billion Eurobond, obtained in 2014 during the administration of former President Uhuru Kenyatta, enhanced local currency value and bolstered investor confidence in Kenya’s monetary policies.
In summary, Kenya’s government has successfully announced a new KSh194 billion loan through a Eurobond, aiming to refinance existing debts while managing future liabilities. This financial move highlights strong investor confidence and reflects proactive fiscal strategies under the leadership of President Ruto. The upcoming debt buyback is set to enhance economic stability, further securing Kenya’s position in international markets.
Original Source: www.kenyans.co.ke