Kenya has managed to raise USD 2.1 Billion in a new Eurobond that will come in two tranches that is 7 year and 12 year tenor.

As a country, we made got our first Eurobond in 2014 which were issued in 10 and 5 year tranches that were well received by the market. Last year we also went into a borrowing spree which netted Eurobonds with 10 and 30 year tranches.

The seven-year portion of the latest issue was priced at 7.0%, while the longer-dated tranche was priced at 8.0%, well below the initial guidance price of 7.5% and 8.5% respectively. The government received bids worth USD 9.5 billion for the Eurobond from investors, an oversubscription of 4.5 times.

According to the government, proceeds will be used to fund infrastructure projects, general budgetary spending and refinance part or all of a USD 750 million dollar bond that will mature on June 24.

This is a classic debt treadmill where one borrows to pay off another loan. As such we can expect that the government will be looking for another Eurobond very soon to pay off the previous loan.