Kenya’s third Eurobond starts trading at Irish Stock Exchange this month

Written By: O’Brien Kimani
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Kenya’s third Eurobond will start trading at the Irish Stock Exchange later this month following its successful sale.

The bond that was sold Wednesday attracted bids totaling 950 billion shillings which is more than four times than the 210 billion shillings that Kenya was seeking to borrow.

National Treasury Cabinet Secretary Henry Rotich has said Kenya will pay interest at seven percent for the seven-year tranche and eight percent for the 12-year paper.

This is the third time that Kenya is resulting to the international debt markets to raise funds to seal budgetary loopholes.

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The first was in June 2014, when the National Treasury floated the debut bond of 200 billion shillings while the second was in February last year when a dual-tranche of 200 billion shillings was issued.

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The two bonds have a tenor of 10-year tenor for Sh100 billion and 30-year tenor for the other 100 billion shillings.

The two bonds had a coupon of 7.25 per cent and 8.25 per cent respectively.

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Thursday, the National Treasury has said a the third Eurobond that was floated this week received bids totaling 950 billion shillings, which is four and a half times more than the 210 billion shillings that Kenya was seeking to borrow.

The loan will be used to finance infrastructure projects, support expenditure budget and to refinance the Sh75 billion of the first Euro-bond issued in 2014 which is due on 24th of next month as well as part of other debt obligations, a dispatch from the National Treasury said.

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In the fiscal year 2019/2020, Kenya is facing a financing gap of 622 billion shillings which will be financed through grants totaling to 46 billion shillings while the balance of 576 billion will be raised through external and domestic borrowing including the Eurobond and syndicated loans instruments.

The third Eurobond is likely to raise more questions on Kenya’s easing debt position that currently stands at more than 5 trillion shillings.

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