Kenya Issues 7-Day Offer to Buy Back Ksh 321B Eurobond


Kenya’s government has invited holders of the Ksh321 billion Eurobonds due in June to tender their notes for repurchase.

According to the Central Bank of Kenya (CBK), the offer which opened on February 7, will expire on Wednesday, February 14, at 5 p.m. New York Time. 

However, CBK also intends to issue new dollar-denominated notes during the stated period to offset debt.

With the purchase price per principal amount set at Ksh 160, 500, Kenya expects to finance the tender purchase with the proceeds from the new notes issuance.

Kenyan Currency Denomination

Photo

Money Sauce

“The Republic expects to finance the purchase of Notes validly tendered and accepted for purchase under the Offer with the net proceeds of the issuance of the New Notes,” read part of the CBK statement.

According to CBK, to participate one requires valid tender instructions by the expiration of the timeline, with a minimum denomination requirement.

Even though the maximum tender amount is to be determined post-pricing of these new notes, the offer is conditional on the successful issuance of new U.S. dollar-denominated notes.

The result announcement of the new tender notes purchases will be released on February 15.

On February 21, CBK expects to settle the purchases.

The offer aims to manage Kenya’s external debt by smoothing out the maturity profile of the notes due in June 2024.

“The Republic is making the Offer, in conjunction with the offering of the New Notes, as part of the proactive management of Kenya’s external indebtedness,” CBK clarified.

As of February 6, the total yield on the 2024 Eurobonds dropped to 9.86% from 15.79%.

The Central Bank of Kenya

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KO Associates





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