Kenya secures Sh210bn ‘Kachumbari’ Eurobond

Treasury Cabinet Secretary Henry Rotich makes his remarks during the Economic Survey Report launch at KICC on April 25, 2019. The ministry revealed that the newest Eurobond was oversubscribed. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• Just like the previous two Eurobonds, Treasury officials did not name any particular project the loan that caught many Kenyans by surprise will fund.
• The Sh210 billion loan has been issued in a dual tranche, one maturing in seven years and the other after 12 years.
• The Treasury hopes to diversify the sources of external debt and reduce over-reliance on current sources of debt financing.

By PAUL WAFULA
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Kenya has accepted offers of Sh210 billion in a third Eurobond it has named the “Kachumbari bond”, which will be used to repay other loans and fund unspecified infrastructure projects.

It is not clear the motivation behind the name of the bond that was listed for secondary trading on the London Stock Exchange Thursday, but kachumbari is a Kiswahili word that describes freshly chopped tomatoes and onion laced with chilli.

Just like the previous two Eurobonds, Treasury officials did not name any particular project the loan that caught many Kenyans by surprise will fund.

But seeing an opportunity in Kenya given its insatiable appetite for debt, investors once again scrambled to get a piece of the action, in what saw the new issue get oversubscribed by 4.5 times.

DEBT BURDEN

The Treasury revealed that the newest Eurobond was oversubscribed after it attracted an order book in excess of Sh950 billion.