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HomeBusinessKenya's eurobond issuance raises $1 billion with a 5 fold oversubsription

Kenya’s eurobond issuance raises $1 billion with a 5 fold oversubsription

Kenya  treasury on the 17th June 2021 confirmed the country had successfully raised $ 1 billion from investors. According to Treasury, the oversubscription is a sign of investor confidence in Kenya’s economic recovery plan.

The bond was issue has a 12-year tenor and is priced at 6.3%

The new loans are expected to add on to public debt currently at Sh7.4 trillion, equivalent to 65.6 per cent of the gross domestic product in nominal terms.

The hunt for new commercial loans is coming on the backdrop of a backdrop of weaker credit rating by global rating agencies pointing out that Kenyan taxpayers will have to dig deep into their pockets to service the planned loan.

The three global rating agencies —Moody’s S&P, Fitch, and  — have downgraded the country’s credit status largely due to its faster than expected accumulation of debt against falling revenue collection and staggering economy raising fears of the possibility of debt distress.

This will be the fourth time Kenya is going to the international market to raise money to support its budget in less than 10 years.

In May 2019, Kenya raised $2.1 billion from international capital markets to pay off other loans including a $750 million Eurobond that matured on June 24, 2019, and other debt obligations.

In 2014, Kenya issued a $2 billion Eurobond and tapped for a further $750 million, while the second Eurobond of $2 billion was issued in February 2018.

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