Kenya has successfully cleared the remaining $556.97 million (Sh71.5 billion) of its $2 billion (Sh257 billion) Eurobond, originally due by June 24, 2024.
The National Treasury’s Public Debt Management Office confirmed that the outstanding amount was settled on Friday, June 21, three days ahead of the maturity date.
This repayment has positively impacted Kenya’s national reserves, pushing them above the four-month statutory requirement for the first time in five months.
According to the Central Bank of Kenya (CBK), the usable foreign exchange reserves now stand at $8.32 billion, equivalent to 4.3 months of import cover as of June 20. This surpasses the CBK’s statutory requirement to maintain at least four months of import cover.
“This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover,” the CBK stated in its weekly brief. The reserves saw an increase of $1.31 billion (Sh168 billion), reaching US$8.32 billion (Sh1.07 trillion).
Earlier in February, Kenya had partially retired its note and re-entered the market with a new issuance. The government received tenders worth $1.48 billion and accepted valid tenders totaling $1.44 billion.
The National Treasury had announced that the outstanding amount would be retired through a mix of syndicated, multilateral, and domestic financing.
In February, the National Treasury confirmed the successful issuance of a new Eurobond intended to buy back the inaugural bond due on June 24. This new loan was divided into three installments, with a weighted average life of six years, and is expected to mature in 2031.
In December, Kenya had to pay $68.7 million (Sh8.8 billion) in interest on the $2 billion (Sh313 billion) Eurobond.
The Parliamentary Budget Office (PBO) had previously indicated that to fully repay the Eurobond, the government would need new funding from external markets, whether through a buyback or paying out from FX reserves, in the absence of a new Eurobond issuance. Potential sources of new funding included the International Monetary Fund (IMF), the World Bank, and syndicated loans via multilateral agencies.
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