The Kenyan government has announced a KSh194 billion loan via a Eurobond issuance, attracting KSh646 billion in investor oversubscriptions. The loan, featuring a 9.5% interest rate, will be repaid in installments from 2034 to 2036. Proceeds will help service maturing debts, enhancing the maturity profile of the nation’s external debt and reflecting strong investor confidence in economic governance.
The Kenyan government, through the National Treasury, has announced a new KSh194 billion loan aimed at managing national debt liabilities. Treasury Cabinet Secretary John Mbadi revealed during a press conference on February 27 that the loan, acquired through a Eurobond issuance, features a fixed interest rate of 9.5% and is set to be repaid in three tranches during 2034, 2035, and 2036.
The finance minister indicated that the loan was significantly oversubscribed, drawing KSh646 billion from investors. The proceeds from this Eurobond issuance will be utilized essentially to service the KSh116 billion Eurobond approaching maturity in 2027. “Proceeds from the 2036 Eurobond will be used to refinance existing external debt including the planned buyback of Kenya’s KSh166 billion ($900 million) Eurobond maturing in 2027,” said Mr. Mbadi.
Mbadi emphasized that this loan acquisition is aligned with the government’s strategic objectives to enhance the maturity profile of Kenya’s external debt. He articulated that the initiative reflects the country’s proactive approach to managing public debt liabilities and reinforces strong investor confidence in the economic management of Kenya.
The CS underscored the importance of collaboration between the government and its investors, crediting them for their commitment to prudent debt management. “Proactively managing public debt remains a key pillar of the Bottom-Up Economic Transformation Agenda (BETA),” stated Mr. Mbadi, highlighting the significance of this transaction in advancing the government’s objectives.
This announcement follows a recent achievement of the Ruto administration, which successfully repaid a Eurobond of KSh 324 billion in February of the previous year, four months ahead of its maturity. This prior buyback, executed under former President Uhuru Kenyatta, positively impacted the local currency and increased investor confidence in Kenya’s fiscal policies.
In summary, the Kenyan government has successfully secured a new KSh194 billion loan through Eurobond issuance, showcasing strong investor confidence and demonstrating a commitment to effective public debt management. The funds will facilitate refinancing of existing debt while aligning with the government’s economic strategies. This move is expected to enhance fiscal stability and pave the way for further successful debt management initiatives.
Original Source: www.kenyans.co.ke
