Kenya has successfully priced a new $1.5 billion Eurobond as part of its strategy to manage public debt, marking a significant milestone in the country’s financial planning. The bond, which carries a 9.5% coupon rate, will be repaid in three equal installments in 2034, 2035, and 2036, resulting in a weighted average maturity of 10 years.
According to Kenya’s National Treasury and Economic Planning Ministry, investor demand was strong, with an order book surpassing $5 billion. The proceeds from this issuance, dubbed the 2036 Eurobond, will be used to refinance existing external debt, including a planned buyback of Kenya’s $900 million Eurobond maturing in 2027. The final amount allocated for the buyback will be determined based on the outcome of an ongoing tender offer, with results expected by March 3, 2025.
This issuance follows Kenya’s successful sale of the 2031 Eurobond in February 2024 and the full repayment of the 2024 Eurobond. The government views this latest bond issuance as a crucial step in smoothing the maturity profile of its external debt and proactively managing liabilities.
By refinancing existing obligations, Kenya aims to reduce short-term debt pressures and stabilize its fiscal position. The strategy aligns with the government’s broader agenda of prudent financial management and investor confidence-building.
The strong investor demand for the new Eurobond reflects continued confidence in Kenya’s economic trajectory. The government emphasized its commitment to maintaining fiscal discipline and fostering a stable investment climate.
In a statement, Kenya’s Treasury Cabinet Secretary, Hon. FCPA John Mbadi Ng’ongo, highlighted that prudent debt management remains a key pillar of President William Ruto’s Bottom-Up Economic Transformation Agenda (BETA). The agenda seeks to drive economic growth through strategic investments and improved public financial management.
“Kenya’s continued successes in the international capital markets underscores strong investor confidence in the country’s economic management. The Government appreciates the strong partnership with investors and remains committed to prudent and sound public debt management. Proactively managing public debt remains a key pillar of the Bottom-Up Economic Transformation Agenda (BETA) spearheaded by H.E. President William Ruto. This pricing marks another significant step in advancing that Agenda,” the statement read.
The successful issuance of the 2036 Eurobond is expected to provide Kenya with financial flexibility, allowing it to manage its debt more efficiently while ensuring sufficient liquidity for future economic projects.
“Kenya received strong demand, with a high-quality order book exceeding US$ 5 billion. Proceeds from the 2036 Eurobond will be used to refinance existing external debt including the planned buyback of Kenya’s US$ 900 million Eurobond maturing in 2027. The final amount for the buyback will be determined based on demand in the ongoing Tender Offer. Results are expected on March 3, 2025.” Mbandi added
Economists and financial analysts note that Kenya’s ability to attract substantial investor interest despite global economic uncertainties is a positive indicator of the country’s creditworthiness. However, they caution that sustained efforts will be needed to ensure that borrowing remains within manageable limits.
Kenya’s external debt management has been a focal point of economic policy, with authorities seeking to reduce reliance on costly short-term borrowing and move towards a more sustainable debt structure.
For investors, Kenya’s ability to secure favorable market terms signals resilience in the country’s economic policies. The successful Eurobond issuance could also pave the way for future engagements in global capital markets as Kenya seeks to balance growth and fiscal sustainability.
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