The government of Kenya has successfully priced a new dual-tranche Eurobond issuance totaling $2.25 billion. This move, which has seen a high demand from international investors, is part of a strategic effort to proactively manage the country’s public debt and smooth out its future maturity profile.
The $2.25 billion issuances are divided into two parts to balance repayment obligations over time.
2034 Notes
A $900 million tranches with an interest rate of 7.875 percent. These notes will be paid back in three equal installments in 2032, 2033, and 2034, resulting in a weighted average life of 7 years
2039 Notes
A $1.35 billion tranches with an interest rate of 8.700 percent. These will amortize in three equal installments in 2037, 2038, and 2039, resulting in a weighted average life of 12 years.
Treasury Cabinet Secretary John Mbadi emphasized that the order book for this issuance significantly exceeded the offered amount, reflecting a robust appetite from global markets.
A major portion of the proceeds will be used to fund a $ 500 million (approximately KES 64.5 billion) tender offer to repurchase existing debt. This buyback targets $ 150 million of the 7.250 percent notes maturing in February 2028 and $ 350 million of the 8.000 percent notes maturing in May 2032.
To encourage participation, the government offered premiums to investors 5.5 percent for the 2032 bond and 3.5 percent for the 2028 bond. This strategy effectively replaces shorter-term debt with longer-dated debt, reducing immediate refinancing pressures. Results of this tender offer are expected to be announced on February 26, 2026.
The success of this pricing follows a credit rating upgrade from Moody’s, which raised Kenya’s sovereign rating from Caa1 to B3 and revised the outlook to stable. Moody’s attributed this positive change to, reduced default risks, stronger foreign-exchange reserves and narrowed current account deficit.
By returning to the global markets, Kenya aligns itself with other African nations like the Republic of Congo and Ivory Coast, which are also benefiting from improved investor sentiment toward emerging market debt.
Also read: Treasury Prioritizes Domestic Borrowing to Address Budgetary Requirements
