Kenya gets $3 bln orders so far for debut Eurobond
17 June 2014, 12:43
Nairobi - Kenya has already received orders worth $3 billion for its debut sovereign bond that seeks to raise $1.5 billion to $2 billion, a senior government source told Reuters on Monday.
The country, which is rated B+ by Standard and Poors, launched its Eurobond roadshow this month.
The government source, who declined to be named, would not give further details about the marketing campaign.
Analysts said the issue was attracting high demand because it comes in two tenors with a five-year tranche offering investors a minimum 6 percent return and a 10-year portion guaranteeing a yield of 7 percent.
"I am not too surprised (by the demand) given the wider product offering," said a fixed-income trader in Nairobi.
"Investors have a different appetite for debt depending on the duration and once the Eurobond market develops, you might find multi-tenor offers become more popular to cater for refinancing risk," he added.
Traders said the pricing of the Kenyan five-year offer was cheaper than the existing Senegalese one of the same tenor, while the 10-year tranche as cheaper than the one issued by Zambia earlier this year.
The Kenyan government has said proceeds of the Kenyan bond will be used to repay an existing syndicated $600 million loan and finance infrastructure projects.