Kenya has successfully raised $1.5 billion (Ksh 193.5 billion) from international creditors through a new Eurobond issuance, the National Treasury has announced. The bond, issued at an interest rate of 9.5 percent, will mature in 2036 and forms part of the government’s broader Liability Management Strategy.
National Treasury and Economic Planning Cabinet Secretary John Mbadi highlighted that the funds will be used primarily to refinance existing external debt, including the buyback of Kenya’s Eurobond maturing in 2027. This move is aimed at easing the country’s debt repayment burden and ensuring fiscal stability.
“Kenya received strong demand, with a high-quality order book exceeding $5 billion. Proceeds from the 2036 Eurobond will be used to refinance existing external debt, including the planned buyback of Kenya’s $900 million (Ksh 116 billion) Eurobond maturing in 2027,” Mbadi stated.
The issuance of the new Eurobond comes at a time when Kenya has been grappling with debt servicing challenges. The government has been seeking alternative financing mechanisms to avoid defaulting on existing obligations while maintaining investor confidence. The strong demand for Kenya’s latest bond suggests that international investors remain optimistic about the country’s economic outlook.
The final amount allocated for the buyback will be determined based on demand in the ongoing Tender Offer, with results expected on March 3, 2025. The success of this buyback will play a crucial role in reducing short-term repayment pressures and stabilizing Kenya’s public debt profile.
This development follows Kenya’s recent efforts to improve its debt sustainability by restructuring its external obligations and seeking concessional financing options. The government has also been working on fiscal consolidation measures, including cutting unnecessary expenditures and boosting domestic revenue collection.
Kenya’s total public debt has been a key concern, with the country relying on a mix of domestic and external borrowing to finance its budget deficits. The issuance of the 2036 Eurobond is part of the broader strategy to extend debt maturities and improve the country’s liquidity position.
Analysts have expressed cautious optimism about the move, noting that while it provides short-term relief, Kenya must implement long-term measures to reduce its reliance on expensive commercial borrowing. These measures include enhancing tax revenue collection, promoting economic growth, and prioritizing investments in productive sectors.
As Kenya navigates its debt management challenges, the outcome of the buyback offer and the government’s broader economic strategy will be closely watched by investors and policymakers alike.
