The National Treasury has confirmed Citi and Standard banks as joint lead managers to advise the exchequer on the refinancing of Kenya’s debut Eurobond in June next year.
The joint lead managers are expected to guide the government on avenues to meet the Sh303.3 billion ($2 billion) with the options laid out including the issuance of a new Eurobond and the tapping of new financing from multilateral lenders.
“Following the completion of a National Treasury procurement process, the government of the Republic of Kenya has appointed Citi and Standard Bank as joint lead managers to assess potential international USD capital markets funding and liability management options for the Republic. Any transaction or transactions will be subject to market conditions,” the National Treasury said in a statement.
In April this year, the exchequer went shopping for a lead manager to help underwrite its next sovereign bond whose proceeds would be deployed in settling the June 2024 maturity.
Market conditions in the international capital markets have nevertheless been unattractive, prompting the government to consider options beyond the issuance of a new sovereign bond.
Subsequently, the exchequer has expanded its options to include an early buyback of the June 2014 Eurobond issue with the view of significantly reducing the outstanding liability before the turn of the year.
During his State of the Nation address last week, President William Ruto said Kenya would make an early Sh45 billion Eurobond payment in December, a move aimed at calming the global financial markets which have been jittery over the country’s ability to meet the maturity in June next year.
Previously, the National Treasury has indicated it would deploy flows from the International Monetary Fund (IMF) to pay down the liability.
The Central Bank of Kenya (CBK) has equally tipped the use of official forex reserves as a means to settle part of the maturity with the reserves being funded mainly from new debt inflows.
Besides the IMF, Kenya has access to funding from other multilateral partners including the World Bank, the African Development Bank, and the Trade and Development Bank.