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    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

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    IBL Group acquires Amethis stake in Naivas International

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    Türkey ambassador promotes bi-lateral trade with Kenya

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    Police boss with checkered history breathes his last

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    Nairobi County Offices Switched off Over Ballooning Power Bills

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  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

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    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

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    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

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  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

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    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

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    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

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    Regional property summit kicks off in Nairobi

    Five Reasons Why Real Estate Increases in Value

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    Optiven Foundation Launches TVET Sponsorship Program

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  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

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  • World Business
    Why Mercedes Benz is Recalling Their Old Models

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    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

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    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

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    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

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    Kenya set to host first ever transport awards

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    Peter Kioko Named National Bank of Kenya Acting Managing Director

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Kenyan Business Feed
  • Home
  • News
    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    High Court Orders Shut Down of All Sports Streaming Websites

    High Court Orders Shut Down of All Sports Streaming Websites

    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Türkey ambassador promotes bi-lateral trade with Kenya

    Türkey ambassador promotes bi-lateral trade with Kenya

    Police boss with checkered history breathes his last

    Police boss with checkered history breathes his last

    Nairobi County Offices Switched off Over Ballooning Power Bills

    Nairobi County Offices Switched off Over Ballooning Power Bills

  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

    Agricultural subsidies unfair – Kenya tells WTO

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

    National Construction Authority Suspends Licences of 18 Contractors

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

    Superior Homes Launches Reward Program for Investors

    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

    Regional property summit kicks off in Nairobi

    Five Reasons Why Real Estate Increases in Value

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    Optiven Foundation Launches TVET Sponsorship Program

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  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

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    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

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    Samsung Showcases its Premium Consumer Electronics Range

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    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

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    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

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    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

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    Why Mercedes Benz is Recalling Their Old Models

    Cold comfort awaits a springtime Davos

    Cold comfort awaits a springtime Davos

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    EA Sports End 29 Years of Video Game Partnership With FIFA

    EA Sports End 29 Years of Video Game Partnership With FIFA

    Central African Republic Adopts Bitcoin as an Official Currency

    Central African Republic Adopts Bitcoin as an Official Currency

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    Netflix Stock Collapses After Losing 200,000 Subscribers

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    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

  • KBF
    • All
    • Agribusiness
    • Banking
    • Insurance
    • Manufacturing
    • Opinion
    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

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    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

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Kenya quietly selling third Eurobond in Europe and the US to finance budget, repay lenders

by Kenyan Business Feed
May 12, 2019
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JAMES ANYANZWA

By JAMES ANYANZWA
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Kenyan treasury officials quietly flew out to Europe and the United States to drum up support for a new $2.5 billion Eurobond—the country’s third in five years.

Nairobi’s quest to take up a new Eurobond comes despite rising concern over the sustainability of the country’s public debt in the wake of a slowdown in revenue growth.

The EastAfrican has learnt that the Treasury officials were due to start meeting investors on Thursday May 9 to market the bond which is being sold in two tranches of 12 and 31 years.

Reuters news agency reported that JP Morgan and Standard Chartered bank have been appointed lead arrangers and that the Eurobond that will be listed on both the Irish and London stock exchanges.

Kenya is in dire need of cash to finance its budget and pay off maturing loans, including a $750 million Eurobond priced at 5.875 per cent that is due for payment this June.

Analysts have however argued that Kenya’s attempts to tap into the international debt market without the International Monetary Fund’s $1.5 billion standby facility—it was withdrawn last year—could dampen investor confidence and push premiums on the bond higher.

Kenya has also suffered a credit rating dent after the IMF downgraded its debt distress rating from low to moderate last October.

Economists reckon African countries seeking to tap into the international debt market through the issuance of Eurobonds this year will have to bear with higher interest rates even as the extent of economic reforms constitute a critical requirement for risk assessment.

“We expect global financial conditions to tighten causing investors to price risks differently. Investors have started demanding higher premiums and the borrowing countries’ reforms will be key to credit assessment,” Razia Khan, the Standard Chartered Bank’s chief economist in charge of Africa and the Middle East, said earlier this year.

“Most sub-Saharan countries are now seeking IMF programmes to boost investor confidence and their credibility,” she added.

Ms Khan reckons Kenya’s external debt ratios have continued to receive more scrutiny partly because external debt service is expected to rise to 26.2 per cent of exports in 2019.

Analysts at the global rating agency Moody’s said Kenya’s Eurobond will attract higher refinancing costs.

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“A successful issuance would support Kenyan government’s foreign exchange liquidity. However, in time its increased reliance on external commercial debt would come at the expense of higher exchange-rate risks and interest payments for the government, aggravating an already large and persistent fiscal deficit,” said Moody’s.

Last year, African Eurobonds suffered in a tough market characterised by a stronger dollar, the Federal Reserve raising US rates, trade tensions and concerns over global growth and that of China, according to the global investment bank Renaissance Capital.

Confidence was eroded further as investors lost money in Argentina and Turkey.

“These factors led to investors pulling money out of emerging and frontier market bond funds that invest in African Eurobonds,” said Gregory Smith, a director-in-charge of fixed income strategies and emerging markets, at Renaissance Capital.

Then the Federal Reserve in March this year all but ruled out any further interest rate increases in 2019 in a surprising monetary policy meeting.

The result is that throughout the first quarter (January-March) of this year, money has flowed into bond funds investing in African Eurobonds.

Concerns over the worsening US-China trade relations however remain, posing a risk to sovereign bond issuers.

Mr Smith reckons that African countries with good economic reform programmes such as lowering fiscal deficit, adequate forex reserves and sound debt management practices coupled with running IMF programmes would do better at winning investor confidence in their Eurobond issues.

“The reforming African economies will fare best when markets are tough,” he said. Ten of the African eurobond issuers, including Angola, Morocco, Ghana, Egypt, and Senegal have IMF programmes while Zambia is still negotiating one.

Last year, Kenya raised $2 billion in a new sovereign bond issues that closed in February.

The bond was issued in two equal tranches of 10 years at a coupon of 7.25 per cent and 30 years at a coupon of 8.25 per cent.

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