Kenya Boosts Local Borrowing Via Reopening 10-Year Bond Sale

Kenya Boosts Local Borrowing Via Reopening 10-Year Bond Sale

From Bloomberg News

Kenya, which sold its debut Eurobond in June, is boosting domestic borrowing this month by reopening a sale of 10-year bonds eight months after the debt was first issued.

The central bank in East Africa’s biggest economy is offering 15 billion shillings ($169 million) of notes and including a green-shoe option, which may see an extra 5 billion shillings sold, it said in a e-mailed statement. The notes have a 12.18 percent coupon.

Kenya is stepping up local borrowing as the shilling heads for its seventh straight weekly decline against the dollar, the longest stretch of losses in six years. Demand for Kenyan debt has outstripped offers, with 102 billion shillings of bonds sold in the first half of 2014, compared with bids of about 180 billion shillings, according to data from the Capital Markets Authority.

In the three months through September, Kenya planned to raise a surplus 26 billion shillings after paying maturing securities, according to Alexander Muiruri, head of fixed-income trading at Nairobi-based Kestrel Capital (East Africa) Ltd. The government has sold 115 billion shillings of debt in the period so far, while paying 142 billion shillings notes coming due, he said by phone today.

“They really need the money because they are behind on their borrowing target,” Muiruri said. “They have not spent much money in the last three months.”


Written by Eric Ombok /Read more at Bloomberg News