Treasury Cabinet Secretary Henry Rotich had earlier indicated a dateline
of late January or early February for the road shows. FILE
By GEORGE NGIGI,
In Summary
- The dateline indicates a delay from the late January or early February deadline as indicated by Treasury Secretary Henry Rotich.
Arrangers of Kenya’s anticipated sovereign bond
are expected to start selling it to investors in road shows beginning
mid next month, a source close to the transaction advisers has
indicated.
The dateline indicates a delay from the late January or early February deadline as indicated by Treasury Secretary Henry Rotich.
“The roadshows (are) scheduled for mid-February,”
said the source who could not be named as he is not authorised to speak
to the Press.
The Treasury has plans to issue a Sh172 billion
Eurobond (between $1.5 billion and $2 billion) to partly finance a Sh330
billion deficit in the national budget.
The Reuters news agency last week reported that
the roadshows would be pushed beyond their scheduled date of January 20.
Roadshows are meetings across the globe set up by arrangers of bond
issues with potential investors to gauge appetite for the securities.
A week ago, Mr Rotich said the Treasury was
preparing key documents for the offer, including an offering circular — a
summary prospectus for a new security normally delivered to individuals
and brokerage houses in order to arouse interest from potential
investors.
The World Bank and analysts have warned that Kenya could pay higher interest rates
for the bond if the US Federal Reserve Bank goes ahead to cut back its
loose monetary policy, which has been a source of cheap cash globally.
The Treasury is, however, taking comfort in the
recent discovery of oil reserves in the country and their confirmed
commercial viability to boost its credit worthiness and cut risk premium
by investors.
Kenya’s political risk is seen to have improved with the peaceful conclusion of the General Elections.
Cases at the International Criminal Court against
President Uhuru Kenyatta and his deputy William Ruto are also seen to be
less of a concern to investors than they were say a year ago.
Kenya is rated B+ with a stable outlook by
Standard and Poors, Moody’s has given it a B1 rating while rating agency
Fitch ranks it B+.
As at October last year the country’s total debt was at Sh2 trillion, 56.4 per cent of the GDP.
Besides financing projects, the loan is also
expected to pay off some of the syndicated loan taken up by the
government two years ago and shore up Central Bank’s foreign exchange
reserves that currently stand at about $6 billion.
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