The Republic of Kenya has launched a $1 billion Eurobond buyback tender offer for its outstanding 7.25 per cent Eurobond due in 2028, as the government moves to ease repayment pressures and refinance part of its external debt.
The offer, announced on Thursday, allows eligible bondholders to tender their notes for repurchase by the Kenyan government at a purchase price of $1,037.50 per $1,000 in principal, representing 103.75 per cent of the aggregate principal amount. Investors will also receive accrued interest payments in addition to the purchase price.
The programme, which opened on 2 October and will close at 5:00 p.m. New York time on 9 October 2025, marks the latest step by the East African nation to actively manage its external obligations. The Eurobond in question, worth $1 billion, is scheduled to mature on 28 February 2028.
Kenya, like many emerging markets, faces significant refinancing challenges as global interest rates remain elevated and foreign investors demand higher returns for riskier assets. By offering to buy back a portion of the 2028 Eurobond, kenya aims to reduce refinancing risks, spread out repayment obligations, and reassure investors about its debt sustainability strategy.
Kenya successfully issued a $1.5 billion Eurobond on 2 October to refinance part of its maturing debt, attracting strong investor demand with subscriptions exceeding four times the targeted amount.
The proceeds will primarily fund the repurchase of the country’s $1 billion Eurobond due in 2028, as the government moves to ease repayment pressures and stabilise its external debt profile. The new Eurobond, launched on 2 October, drew an order book of $7.3 billion
The $1.5bn Eurobond was split into two equal tranches of $750m each.
The seven-year tranche, due October 2033, was priced at 98.30 with a 7.875% coupon, yielding 8.2%.
The 12-year tranche, due October 2038, was priced at 97.134 with an 8.8% coupon, yielding 9.2%.
Both tranches were structured under Rule 144A/Reg S format, issued as senior unsecured notes with semi-annual coupon payments. Settlement is expected on 9 October 2025, aligning with the closing date of the tender offer.
“The Republic will accept and settle the purchase of Notes validly tendered in the Offer subject to the successful completion of the issue of the New Notes or such other financing as the Republic may determine,” the statement said.
Key terms of the offer
Bond: $1 billion Eurobond, 7.25% coupon, maturing 28 February 2028
Purchase price: $1,037.50 per $1,000 in principal
Offer period: 2 October – 9 October 2025 (5:00 p.m. New York time)
Settlement: Subject to new financing issuance
Bondholders will receive a cash payment rounded to the nearest cent, including accrued interest from the last coupon date.
Kenya’s external debt has been under scrutiny from international credit rating agencies and multilateral lenders. In recent years, the government has leaned heavily on Eurobonds to finance its budget, making it vulnerable to shifts in global capital markets.
This is not Kenya’s first foray into liability management. Earlier transactions have included refinancing operations and syndicated loans, though rising global borrowing costs have complicated access to affordable credit.
The new Eurobond buyback tender offer comes at a time when the country is also in discussions with the International Monetary Fund (IMF) and World Bank for budgetary support and structural reforms. These engagements are seen as critical in stabilising the economy and ensuring debt sustainability.
The IMF has previously warned that Kenya’s debt remains at high risk of distress, although authorities argue that continued reforms and improved revenue mobilisation will help stabilise public finances.
Kenya’s move comes amid a broader wave of debt management exercises by emerging markets facing the twin challenges of slowing growth and elevated global borrowing costs. Countries from Ghana to Egypt have engaged in buyback or reprofiling operations in a bid to calm investor nerves and avoid defaults.
For Kenya, the 2028 bond is one of several Eurobonds outstanding, with others maturing between 2032 and 2048. How investors respond to this latest offer will provide clues about Nairobi’s ability to continue tapping international markets for funding.
The Ministry of Treasury has framed the Eurobond buyback tender offer as a step towards sustainable debt management, even as it faces rising demands from domestic constituencies for more spending on infrastructure, social services, and economic recovery.
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