Kenya has officially cleared its Ksh116.3 billion ($900 million) Eurobond debt.
The government borrowed $900 million in 2017 by issuing Eurobonds. This means that it sold debt to international investors and promised to pay it back with interest.
However, because the due date for paying back the debt was approaching, the government decided to buy back some of it early through a tender offer.
The buyback offer allowed investors holding the 2027 bonds to sell them back to the government at an agreed price, helping Kenya reduce the amount it needs to repay in 2027.
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The Buyback Offer from Kenya
The offer was announced in February, and by March 4, all the bonds that were validly tendered were accepted.
It offered a purchase price of Ksh129,322.50 ($1,002.50) for every Ksh129,000 ($1,000) in bonds, making it slightly profitable for bondholders.
“The remaining portion of the 2024 Eurobonds not purchased in the Tender Offer will be funded through a mix of the government funds and financing from multilateral and bilateral sources, including bank syndication,” national treasury had explained in a 2024 statement.
Moreover, the government was supposed to settle everything by March 10, but due to technical delays, payments were pushed to March 12.
Citigroup (NYSE:C) Global Markets Limited and The Standard Bank (JO:SBKJ) of South Africa Limited served as the Dealer Managers for the transaction, while Citibank N.A, London Branch acted as the Tender Agent.
Paying back the Eurobond could make it easier and cheaper for the government to borrow more money in the future, because it shows that it can handle its debt well.
Also Read: Govt Issues Ksh193.5 Billion Bond in New Debt Swap Move
Kenya’s New Eurobond and Repayment Plan
At the same time, the national treasury borrowed Ksh193.5 billion ($1.5 billion) set to mature in 2036 with a 9.5% interest rate.
The move was part of a bigger plan to enable the government to extend its repayment obligations by replacing the old debt with the new 2036 bond.
Earlier, Treasury explained that the debt will be repaid over three installments in 2029, 2030 and 2031.
“International capital markets provide essential liquidity for the government, and the successful transaction underscores investor confidence in Kenya,
“The government appreciates the strong partnership with investors, committing to sound debt management. Proactively managing debt is a key pillar of President William Ruto’s administration, and this transaction represents a significant step toward achieving that goal,” indicated the national treasury.
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