Kenya intends to raise USD 2 billion (circa 200 billion shillings) in the international markets via two Eurobond issues.
The maturity of the two Eurobond issues are 10-years and 30-years and the initial pricing guidance is 7.625 and 8.625 percent respectively.
The coupon on the existing 10-year is at 6.875 percent and as such, the initial pricing on the 10-year has factored a risk premium that has been triggered by recent debt level concerns that led to Moody’s downgrade.
As at December, commercial financing stood at 10.76 billion shillings of the 250 billion shillings quantum in the current fiscal year and a successful Eurobond performance will help plug the deficit.
As at this point, the official prospectus has not been made public but the proceeds of the sale are likely to refinance existing external obligations due next year.
USD 750 million of the maiden Eurobond issue is due to mature in June 2019. In 1Q17, Kenya acquired two-year USD 250Mn syndicated facility from Trade Development Bank coupled with USD 800 million dual-tranche commercial loans due in 2019 and 2020.
The latter syndicated loan was arranged by Citi, Standard Bank and Standard Chartered (who in addition to JP Morgan are also the book runners of the current Eurobond) together with Rand Merchant Bank. The twin international sovereign bond issues will be listed on the Irish Stock Exchange.