The Kenyan Treasury is in the final stages of selecting lead arrangers for the country’s upcoming Eurobond issuance. This move is part of the government’s efforts to signal its intentions to the market, particularly considering the maturity of a $2.0 billion (Sh286.3 billion) Eurobond in June 2024.
A senior official from the National Treasury stated that the procurement process is nearing completion, and the final results will be announced once the relevant timelines are confirmed. The shortlisted banks being considered as lead arrangers for the planned issuance include JP Morgan, Citigroup, Standard Bank, and Standard Chartered Bank.
In July, a government delegation engaged with bond investors in London, discussing various options for addressing the upcoming large ticket maturity. The options considered include full repayment with multi-tranche bonds, part buy-back and part repayment with multi-tranche Eurobonds, and part swap part repayment with multi-tranche Eurobonds. The finer details and strategy will be determined by the lead arrangers.
Additionally, the government is exploring the possibility of issuing a Shariah-compliant bond (Sukuk) and bonds denominated in currencies other than the US dollar to mitigate foreign exchange pressure caused by a strengthening greenback.
Opinion: As Kenya prepares for the maturity of a significant Eurobond, selecting capable lead arrangers is crucial to navigate the complexities of debt management and international financial markets effectively. Exploring diverse options, such as Sukuk and non-dollar denominated bonds, showcases the government’s commitment to innovative financing strategies to address economic challenges.