A fresh KSh194 billion loan has been acquired by the government through the National Treasury as part of its debt burden management plan.
The multi-billion-shilling loan, which has a fixed interest rate of 9.5%, will be paid back in three installments in 2034, 2035, and 2036, Treasury Cabinet Secretary John Mbadi revealed in a press conference on Thursday, February 27.
The finance minister disclosed during the announcement that investors had oversubscribed the loan, which was obtained through a Eurobond sale, by KSh646 billion.
The Ksh116 billion Eurobond, which is scheduled to maturity in 2027, will be serviced with the money raised from the sale of the new Eurobond, according to CS Mbadi.
“Kenya’s Ksh166 billion ($900 million) Eurobond maturing in 2027 will be repurchased, and proceeds from the 2036 Eurobond will be used to refinance existing external debt,” CS Mbadi disclosed.
Demand in the current tender offer will decide the ultimate buyback amount. March 3, 2025, is when results are anticipated,” the finance minister continued.
Mbadi stated that the purchase of the loan is in line with the government’s plan to proactively manage public debt responsibilities and even out the maturity profile of Kenya’s external debt.
The CS went on to say that strong investor trust in Kenya’s economic management was highlighted by the country’s access to global finance markets.
Mbadi continued by praising the solid collaboration between the government and investors, who he claimed were dedicated to responsible and sensible public debt management.
“A fundamental component of President William Ruto’s Bottom-Up Economic Transformation Agenda (BETA) is the proactive management of state debt. Another important step in furthering that goal is this pricing,” the CS said.
The most recent deal follows the successful repayment of another Eurobond by President Ruto’s administration in February of last year, four months before to its expiry.
The KSh 324 billion Eurobond was purchased in 2014, during the government of former President Uhuru Kenyatta, and it matured in June of last year. Its buyback improved investor trust in the nation’s monetary policy while also greatly increasing the value of the local currency.
