Treasury seeks proposals for Sh206b Eurobond sale

Kenya’s Government is seeking proposals from banks about a possible $2 billion (Sh206 billion) Eurobond offering in the first quarter of 2018, according to two people familiar with the matter.

The National Treasury asked banks for pitches on how to structure the sale, said the people, who asked not to be identified because they aren’t authorised to speak publicly about the matter.

The deadline for proposals is November 29, they said.

Budget deficit

Kenya’s return to international capital markets would mark its first sale of foreign debt since a debut Eurobond in 2014.

The National Treasury is seeking to plug a budget deficit that’s forecast to narrow to 6.4 per cent of gross domestic product in the fiscal year through June, from 8.5 per cent last year.

The Government plans to re-enter the Eurobond market before the end of the current budget year, though a placement is likely from February onward as funds are required for spending purposes, the people said.

Proposals from banks must outline the costs of either a five-to-10-year issue to be repaid in bullet form, or 12- to 15-year securities amortising in the final three years, the people said.

A Government roadshow is expected to start in January, said one of the people.

Treasury Principal Secretary Kamau Thugge didn’t respond to two text messages and four calls to his mobile phone seeking a comment on the matter.