The National Treasury has announced that Kenya has secured $2 billion (Sh203billion) in a new Eurobond issue.
Treasury Cabinet Secretary Henry Rotich in a statement on Thursday said the issue was oversubscribed seven times, meaning that Kenya needed Sh203 billion, but attracted bids amounting to Sh1.4 trillion.
“[A successful roadshow was] conducted with International investors. It covered a wide geography and has resulted in a significant level of interest,” he said.
“The fact that we got $14 billion in investor appetite reflected the continued support the country receives and makes it one of the highest order books for an issue from Africa.”
Treasury said the cash will be used for development initiatives as well as for liability management.
“The funds will be applied towards the government’s development initiatives and liability management. We will continue to invest in the infrastructure and capacity to roll out these programmes.”
The issue was executed by global lenders Citi, JP Morgan, Standard Bank of South Africa and Standard Chartered Bank.
This becomes the second Eurobond issue by Kenya, after the $2.8 billion secured in 2014 in five and 10-year tranches.
The new bond is listed on the London Stock Exchange (LSE) and was issued in two equal tranches of 10 years at an interest of 7.25 per cent and 30 years at an interest of 8.25 per cent.
Somebody please explain how…
Somebody please explain how this kind of bond works….am clueless.
Simple explanation: A bond…
Simple explanation: A bond issue is new debt (borrowing). Let’s say you want to build a new road and you don’t have cash to fund it. Let’s also assume that once you build the road, you will have toll stations where drivers can pay fees to use the road. The toll fees will be your revenue source. Knowing that you will generate revenue from the toll fees, you can look for investors who want to lend you money over a long period of time to fund the construction of the road. Once the road is completed, you can use the toll revenues you collect from users to slowly pay back the borrowings from the investors. In essence, what you have done is take a new debt to pay for the construction and you have made a promise to the investors to retire that debt slowly over the years with the revenue you collect. The payments you make could be structured to include principal and interest. In other situations, you can pay interest only for years and make a balloon (lump sum) payment of the principal at the end. I hope this explanation helps.
Thank you @sokora…
Thank you @sokora.
I wonder how/why this kind of loan is better than the bilateral loans which we have all along borrowed…. is the interest rate lower or what are the advantages to us, Kenyan taxpayers?
Can these thugs led by…
Can these thugs led by Muigai Kamau & Ngina explain how the previous EURO BOND we are repaying was spent?Or just tell us how they shared the loot.Amukemi waKenya.We must demand accountability of these loans.It should not stop there,NO,jambazi Kibaki na wauaji Moi and Raila must also explain how the spent our money or how they shared all they looted.
Kenyans MUST also stop…
Kenyans MUST also stop praising and worshiping these gods.These devils have no feelings on you,poor/hungry Kenyans.Yao ni ku-loot everything.
people in Kenya don’t care…
people in Kenya don’t care about these issues as long as it is their guy doing it… we will always be a shithole country. They got euro bond and almost all of it was siphoned by Waiguru and Company, now this is another public debt to benefit just a few and no questions will be asked. One day things will explode in their faces…and it wont take long
at 7.25% interest rate, they…
at 7.25% interest rate, they will pay Ksh 15 billions in interest alone. That is enough money to build a hospital in each county and much more. we need to be smart people
I hope Kenya becomes unable…
I hope Kenya becomes unable to repay the loan, then we get auctioned ?♂️. …..This shows how clueless I am on this issue.