Kenya Floats Tender Offer For The 2024 Eurobond Buyback

The market was mixed as reflected by the benchmark indices performance. The NASI and the NSE 25 gained 0.1% each with NSE 20 rising 0.2%. The N10, on the other hand, shed 0.3% in the day.

Equity turnover edged downwards to USD 0.5m (-8.6%) with local investors dominating market activity at participation levels of 55.2% up from 39.8% in the prior session.

Safaricom was the day’s top mover, accounting for c. 29.9% of the activity levels. The counter gained 0.4% to KES 13.20.

Banking stocks dominated trading activity with DTB, a surprise top mover, leading on a 6.1% gain to KES 48.80. Equity Group and KCB Group shed 2.6% and 1.5% to KES 37.20 and KES 20.15, respectively.

EABL continued on its recovery for the eighth session gaining 1.3% in the day to KES 117.25 – on foreign buying.

Centum was the day’s top gainer on a 9.2% rally to KES 8.76 while Crown Paints shed 9.9% to KES 36.05 – closing as the leading laggard.

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Foreign investors remained bearish printing net outflows of USD 13.2K. Safaricom led the selling charge while EABL led the buying charge – both for the second consecutive session.

The yields for Kenya’s Eurobond maturing in June 2024 dropped by c. 460bps on news of the country’s offer to buy back its USD 2 billion debt and further announcement of plans to float new securities in the Eurobond market.

The maximum amount that the government will repurchase is dependent on the amount raised in its offering of new securities in the Eurobond market – to be priced on 12th February 2024.

The buyback offer — which is at par value and includes payment of accrued interest — began on 7 February 2024 and will expire at 5.00 p.m. New York City time on 14 February 2024  unless extended, re-opened, amended, or terminated by the Republic.

For the buyback, the minimum principal amount is USD 200,000 with integral multiples of USD 1,000 after that. Key timelines: 12th February – Details of the new securities I 14th February – close of offer I 15th February – announcement of performance I 21st February 2024 – settlement.

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