Kenya plans to start its Eurobond road show from the west coast of the US (Los Angeles and San Francisco) on June 5 to the east coast (New York) before ending up in London, UK. The show is aimed at meeting fixed income investors in the US and UK ahead of a debut US dollar Sovereign Bond issuance, Reuters reported.
The east African nation plans to sell an international bond worth up to $1.5 billion that will be used to fund infrastructure projects including rail and roads and retire a $600 million syndicated loan.
The sovereign, rated B+ by Standard & Poor’s and Fitch, has hired Barclays, JP Morgan, Standard Bank and QNB Capital to arrange the meetings.
“The roadshow will take four or five days, so we could go to the markets this month,” Kenya’s Treasury Secretary Henry Rotich told Bloomberg during the African Development Bank’s annual meetings in the Rwandan capital, Kigali.
Kenya’s debut Eurobond issuance plan was derailed by two court-awarded payments linked to a corruption scandal that had blocked the offering. The payments worth $16 million in total were made on May 19 after President Uhuru Kenyatta authorized them, opening up any “legal huddles” blocking the bond sale.
The payments were for security contracts that form part of the so-called Anglo-Leasing corruption scandal, in which the state awarded deals to fake companies, according to the Law Society of Kenya.
The central bank also said it is counting on the hard currency raised from the Eurobond to prop up the local currency, which has come under intense pressure from a ballooning current account deficit and reduced performance by key sectors such as tourism as the country struggled to contain terrorists attacks.
The Kenyan shilling hit a two-and-half year low of 88 to the dollar last week and has only been supported by the central bank interventions to mop up liquidity and inject undisclosed amount of dollars directly to commercial banks.
Aly Khan Satchu, chief executive officer of Rich Management Ltd. in Nairobi told Bloomberg that “People are looking forward to an inflow of dollars” from the Eurobond sale.
