Kenya is silently auctioning her third Eurobond worth $2.5 billion despite alarm over the country’s ballooning public debt

 Kenya tables third Eurobond worth $2.5 billion in Europe and US
  • Kenya is silently looking for buyers for her third Eurobond worth $2.5 billion.
  • JP Morgan and Standard Chartered Bank have been appointed lead arrangers and that the Eurobond that will be listed on both the Irish and London stock exchanges
  • Kenya is currently in dire need of cash to finance its budget and pay off maturing loans, including a $750 million Eurobond priced at 5.875 per cent that is due for payment this June. 

Kenya is silently looking for buyers for her third Eurobond worth $2.5 billion as it races against time to get cash flow to finance its budget and pay off a number of maturing loans due in a few months’ time.

Treasury officials are said to have quietly flown out to Europe and the United States to drum up support for the country’s third Eurobond in five years.

Treasury officials were due to start meeting investors on Thursday, May 9 to market the bond which is being sold in two tranches of 12 and 31 years, the East African reported.

JP Morgan and Standard Chartered Bank have been appointed lead arrangers and that the Eurobond that will be listed on both the Irish and London stock exchanges, according to Reuters news agency.

Kenya is currently in dire need of cash to finance its budget and pay off maturing loans, including a $750 million Eurobond priced at 5.875 per cent that is due for payment this June. 

Nairobi’s quest to take up a new Eurobond comes in the backdrop of rising concern over the sustainability of the country’s public debt in the wake of a slowdown in revenue growth.

It is not yet clear, however, if Kenya’s effort will bear any profits. Analysts are of the opinion that the country’s attempts to tap into the international debt market without the International Monetary Fund’s $1.5 billion standby facility, which was withdrawn last year, is likely to dampen investor confidence and push premiums on the bond higher.

Kenya has also suffered a credit rating dent after the IMF downgraded its debt distress rating from low to moderate last October.

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