Kenya secures Sh194bn for Eurobond

Kenya has taken a major step in managing its public debt by raising Sh194 billion from foreign markets through a Eurobond, part of a larger strategy to restructure its 2027 debt.

The new issuance not only secures funds to repurchase a portion of the 2027 bond but also extends Kenya’s repayment timeline to 2036, easing short-term financial pressure.

The government executed a Sh74.89 billion buyback of the 2027 Eurobond, using proceeds from the new $1.5 billion bond, which was issued at a 9.50 percent coupon and priced at a 9.95% yield.

The bond will be paid in equal parts over its final three years, giving it a ten-year average life.

The transaction closed on March 5, with the tender offer settling five days later.

The move is part of a growing shift in the country’s fiscal approach, with Treasury officials saying the strong investor response reflects confidence in Kenya’s economic plans.

The deal had a 64% participation rate in the buyback and was upsized from its original target.

"This transaction underscores Kenya’s commitment to prudent fiscal management and sustainable debt service. It reduces near-term refinancing risk and positions the country to pursue its economic transformation agenda with greater financial stability," said Citibank Kenya Managing Director and CEO Martin Mugambi.

Mugambi added that the deal reinforces Citi’s role in helping Kenya access international financing and support development goals.

“This deal reaffirms Citi’s role as a trusted advisor in supporting sovereign access to international capital. It also highlights our ongoing commitment to Kenya’s development and economic growth,” he said.

Stanbic Bank Kenya and South Sudan CEO Joshua Oigara said the Eurobond issuance will help stabilise the country’s fiscal path and maintain access to global capital.

"Strong investor demand reflects confidence in Kenya’s fundamentals and strategic direction. Standard Bank remains committed to supporting Kenya’s economic transformation by delivering innovative financial solutions," said Oigara.

The transaction follows Kenya’s earlier return to international markets, marking the second successful deal with Citi and Standard Bank as part of its liability management strategy.

Treasury Cabinet Secretary John Mbadi revealed that Kenya’s total public debt reached Sh11.02 trillion by March 2025, up from Sh10.5 trillion in June 2024.

He said this rise reinforces the need for stronger debt controls and more sustainable borrowing practices.

The government’s 2025 Medium-Term Debt Strategy (MTDS), launched earlier in the year, outlines a plan to manage public debt over the next three years.

The strategy includes reducing short-term borrowing, lengthening debt maturities, and strengthening the domestic debt market.

"The goal of this strategy is to realign our borrowing practices to ensure debt sustainability while supporting economic growth. We must proactively manage our liabilities to reduce refinancing risks and protect the economy from external shocks," said Mbadi.

The MTDS also focuses on balancing concessional and commercial borrowing to reduce the risk of future debt distress.

Treasury hopes the combined effect of the new Eurobond and the strategy will boost investor confidence and support long-term economic recovery.