Kenya is set to return to the international bond market on Monday, February 12, for the first time since 2021 to apply for a new Eurobond. The objective is to raise funds to finance the buyback of the 10-year $2 billion (Sh321 billion) Eurobond.
This move has assuaged investor concerns regarding the country’s ability to repay the debt, which matures in June.
The decision to issue the bond comes as a surprise, deviating from earlier expectations that the National Treasury would utilize the country’s forex reserves or loans from multilateral lenders to fund the planned buyback.
On Wednesday, the Treasury initiated the tender offer for bondholders interested in participating in the buyback, which has been priced at the bond’s par or face value.
Treasury also stated that the buyback would be funded by the proceeds from the new Eurobond offer, the amount of which was not specified.
Sellers will receive accrued interest on their bonds, with the most recent interest payment made in January.
Investors have also reacted positively to the announcement of the buyback and new bond sale.