The government of Kenya, through the National Treasury, has secured Sh194 billion loan as part of its strategy to manage public debt.
Treasury Cabinet Secretary John Mbadi made the announcement on Thursday, February 27, stating that the move seeks to reduce the country’s debt repayment burden.
Speaking at a press briefing, Mbadi explained that the new loan, secured through a Eurobond issuance, comes with a fixed interest rate of 9.5% and will be repaid in three installments spread across 2034, 2035, and 2036.
Investors showed great interest in the bond, with oversubscriptions totaling to Sh646 billion. Mbadi clarified that the money from the bond will be used to settle an existing Sh116 billion Eurobond maturing in 2027.
“Proceeds from the 2036 Eurobond will be used to refinance existing external debt including the planned buyback of Kenya’s Ksh166 billion ($ 900 million) Eurobond maturing in 2027,” he stated.
“The final amount for the buyback will be determined based on demand in the ongoing Tender Offer. Results are expected on March 3, 2025,” CS Mbadi added.
The loan’s acquisition is part of the government’s broader plan to restructure external debt and ensure Kenya meets its financial obligations.
He also pointed out that the strong demand for Kenya’s Eurobond reflects investor confidence in the country’s economic management.
“Proactively managing public debt remains a key pillar of the Bottom-Up Economic Transformation Agenda (BETA), spearheaded by President William Ruto. This pricing marks another significant step in advancing that agenda,” he said
This new financing follows after a successful repayment last year when the government settled a Sh324 billion bond taken out in 2014, four months ahead of its June 2024 maturity.
