Govt to now ease its domestic borrowing plan
United States investors bought a majority of the 2 billion dollar Kenyan Eurobond followed by investors from the United Kingdom.
American investors bought 66 percent of the sovereign bond that started trading at the Irish stock exchange on Tuesday.
Revealing details of the bond, President Uhuru Kenyatta said the government will now ease its domestic borrowing plan in the next financial year.
Proceeds from the Eurobond will finance energy, roads, and agricultural projects.
Kenya’s debut 2 billion dollars Eurobond has proved to be a huge success with the bond arrangers led by American financial company JP Morgan receiving bids worth more than 8.8 billion dollars.
The offer which closed yesterday saw an over-subscription of over 400 percent which is a major boost to the Kenyan economy which is has also received positive ratings from rating agencies.
According to the bonds documents released today by the government, American and British investors topped the list of the buyers of the Kenyan bond at 66 and 14 percent respectively.
African and Middle East investors did not show much interest in the bond.
President Uhuru Kenyatta has told the nation that funds raised from the bond will be utilized prudently to ensure that benefit from the target sectors.
National Treasury hinted at easing its domestic borrowing in order to give local borrowers more room to borrow.
National Treasury and the Central Bank of Kenya are also drafting a new interest rates calculation format for local banks in a move to pressure lending rates to within a single digit figure.
To ride on the success of the 2 billion dollar Eurobond, Kenya plans to float more bonds going forward to finance critical sectors of the economy.