Kenya Launches Roadshow For Second Eurobond

Kenya Launches Roadshow For Second Eurobond

Kenya launched a roadshow in London on Tuesday for its second Eurobond offer in less than two years.

According to a Global Capital report, the East African nation has mandated three banks — Barclays, Citi and Standard Chartered — to a non-deal roadshow that will meet investors in London from April 5.

Henry Rotich, Kenya’s finance minister, told Financial Times in January that the country was planning to gauge investor sentiment with a new 15- and 20-year eurobond offer this year.

The minister, together with Investment Secretary Esther Koimett and his personal assistant Donald Murgor are leading the delegation in London.

There are expectations that investors will question alleged misuse of funds from a $2 billion Eurobond, with five and 10 year maturities, the country raised in June 2014.

About $600 million of the money raise in the previous bond was used to repay a syndicated loan, while the rest are said to have been spent on development infrastructure projects such as roads, rural electrification and health projects.

But Kenya’s main opposition leader, Raila Odinga, has called for an independent forensic audit to track about $1 billion of the proceeds from the debut eurobond sale that he claims didn’t make it into the correct government accounts.

A bankers involved in the London roadshow downplayed any effect of the Eurobond misuse rumors and said addressing investor concern over the allegations was not the main purpose of the meetings.

Discover How Affordable Peace of Mind Can Be:
Get Your Life Insurance Quote Today!

According to a June 2014 BBC report, US investors bought about two thirds of the first eurobond issue, while British investors bought about a quarter.

Rotich said in January that he was also exploring other ways to raise money including Islamic financing, a soft loan from the China Development Bank, export credit arrangements and a possible Samurai bond.

Kenya could become the first African nation to tap the international debt markets this year  in the midst of a slowdown in sovereign issues from the continent as commodity prices remain subdued and local currencies fall.

Sub-Saharan Africa bond sale boomed before the global commodities price rout stated in the last quarter of 2014, but declined in 2015 when several economies in the region came to the brink of crisis.

A muted bounceback in oil and metal prices could however offer some support, Reuters reported.