Kenya has successfully issued a USD 2.3 bn (Kshs 290.3 bn) Eurobond aimed at refinancing near-term debt obligations and extending the country’s external debt repayment schedule. The move replaces portions of debt due in 2028 and 2032 with longer-dated, amortising bonds, a strategy the National Treasury says reflects growing investor confidence following a recent sovereign rating upgrade.
The government announced on February 20 that it priced a dual-tranche bond sale consisting of USD 900.0 mn in notes maturing in 2034 with a 7.9% interest rate and USD 1.4 bn in notes maturing in 2039 carrying an 8.7% yield. Both bonds will be repaid in three equal instalments rather than a single lump-sum payment, helping distribute repayment obligations over time.
According to the Treasury, this structure is intended to smooth Kenya’s external debt maturity profile and reduce the risk associated with large repayments coming due at once. Strong investor demand for the issuance reportedly exceeded the amount offered, enabling Kenya to return to international capital markets after a period when many frontier economies faced limited access.
The successful transaction follows improved market sentiment toward African borrowers and comes shortly after Moody’s upgraded Kenya’s sovereign credit rating from Caa1 to B3, citing reduced short-term default risk, stronger foreign exchange reserves, and a narrower current account deficit.
Funds raised through the Eurobond will primarily be used to refinance existing public debt. This includes a previously announced tender offer to repurchase up to USD 150.0 mn of the 7.3% notes due February 2028 and up to USD 350.0 mn of the 8.0% amortising notes due May 2032, both inclusive of accrued interest. Any remaining proceeds will support general government budget needs.
Under the tender terms, Kenya is offering USD 1,035 for every USD 1,000 of principal on the 2028 notes and USD 1,055 per USD 1,000 of principal for the 2032 notes, in addition to accrued interest. The offer, announced via the London Stock Exchange on February 18, is scheduled to close on February 25 at 5:00 p.m. New York time, with results expected on February 26 and settlement planned for March 3. All repurchased bonds will be cancelled and permanently retired.
The newly issued 2034 notes will be repaid in instalments between 2032 and 2034, resulting in a weighted average life of about seven years. Meanwhile, the 2039 notes will amortise between 2037 and 2039, giving them an estimated weighted average life of 12 years.
By replacing near-term maturities with longer-term amortising bonds, the government aims to reduce rollover risk and create a more manageable external debt repayment schedule.
Friday, March 13, 2026
Kenya Raises USD 2.3 Bn Eurobond to Extend Debt Maturity and Ease Refinancing Pressure
