Kenya Unveils New KSh194 Billion Eurobond Loan for Debt Management

Kenya’s government has announced a new KSh194 billion Eurobond loan to manage debt liabilities, featuring a 9.5% fixed interest rate with repayment set for 2034-2036. Treasury CS John Mbadi stated that the loan received KSh646 billion in oversubscription and will refinance existing external debts and a maturing Eurobond due in 2027.

The Kenyan government has announced the issuance of a new KSh194 billion loan as part of its strategy for managing debt liabilities. Treasury Cabinet Secretary John Mbadi revealed that the loan, acquired via a Eurobond, features a fixed interest rate of 9.5 percent and will be repaid in three installments scheduled for 2034, 2035, and 2036.

During the press briefing held on February 27, 2025, CS Mbadi disclosed that the Eurobond offering was significantly oversubscribed, generating KSh646 billion in investor demand. The proceeds from this issuance are earmarked for servicing the existing KSh116 billion Eurobond, which is due to mature in 2027.

Furthermore, CS Mbadi confirmed that funds raised from the new Eurobond will also be utilized for refinancing existing external debts, including a planned buyback of Kenya’s KSh166 billion ($ 900 million) Eurobond maturing in 2027. The specific amount for the buyback will depend on the demand revealed in the ongoing Tender Offer, with results anticipated by March 3, 2025.

The acquisition aligns with Kenya’s broader strategy to enhance the maturity profile of its external debt and actively manage public debt obligations. CS Mbadi emphasized that access to international capital markets reflects robust investor confidence in the nation’s economic management system.

He further acknowledged the solid collaborative relationship between the government and its investors, who are dedicated to maintaining prudent public debt management principles. “Proactively managing public debt remains a key pillar of the Bottom-Up Economic Transformation Agenda (BETA), spearheaded by President William Ruto. This pricing marks another significant step in advancing that agenda,” CS Mbadi stated.

This latest Eurobond transaction follows the previous administration’s successful repayment of another Eurobond in February 2024, four months pre-maturity. The KSh 324 billion Eurobond, originally issued in 2014 under former President Uhuru Kenyatta, positively influenced the local currency and bolstered investor confidence in the country’s fiscal policies.

In conclusion, the Kenyan government’s acquisition of a KSh194 billion Eurobond loan represents a strategic move to effectively manage its debt liabilities. This financing initiative not only underscores investor confidence but also aligns with the government’s broader economic transformation strategy. The proactive management of public debt remains essential for economic stability and growth in Kenya.

Original Source: www.kenyans.co.ke