Standard Bank Group has served as joint lead manager and book-runner for the Republic of Kenya’s new $1.5 billion Eurobond and joint dealer manager for the concurrent tender offer of $1.4 billion outstanding Eurobonds maturing in June 2024. This transaction marks Kenya’s first since 2021 and demonstrates the Republic’s efforts to diversify its funding sources, marking a triumphant return to the capital markets.
The Eurobond, which closed on February 16th, was priced with a yield of 10.375% and a 9.75% coupon. It will mature in 2031, featuring a six-year weighted average life as the principal will amortise in equal instalments in the final three years to maturity. The proceeds from the Eurobond were utilized to fund the tender offer for the 2024 Notes, which settled on February 21st, 2024.
The Eurobond garnered strong demand from investors, reflecting their support for Kenya’s debt management strategies. This enabled the Republic of Kenya to tighten pricing and increase the issuance size compared to initial guidance. The tender offer was highly successful, with over 72% participation from investors, leaving just over $550 million in bonds outstanding.
Joshua Oigara, Chief Executive of Stanbic Bank in Kenya and South Sudan, a member of Standard Bank Group, expressed pride in facilitating the Eurobond for Kenya. He highlighted the growing investor confidence in Kenya and the significance of renewed access to capital markets for enabling growth.
“We are proud to have facilitated this Eurobond for Kenya. The significant demand we saw for the bond reflects the growing confidence in Kenya from investors. We are enthusiastic about the renewed access to capital markets, the overall success of the transaction and the growth this enables… A deep understanding of Kenya’s economy, regulations and people are at the heart of everything we do at Standard Bank. It is encouraging to see the investor community take note of the opportunity the country represents.”
Joshua Oigara
The decision by the National Treasury to select Standard Bank and Citi Bank as lead arrangers for a $2 billion bullet repayment of Kenya’s debut Eurobond maturing in June demonstrates confidence in the local economy and the capabilities of banks operating in Kenya. This move underscores the banks’ commitment to facilitating Kenya’s fiscal stability through innovative financial solutions.
To successfully serve as a lease manager, a bank needs the right experience and a clean track record. Standard Bank demonstrates this with its rich history of successful financial advisory services across Africa. Their appointment as lease managers for Kenya’s Eurobond is a testament to their expertise and track record.
The appointed financial institution must also demonstrate a deep understanding of local and African markets. This local knowledge is invaluable when advising on financial transactions within the continent.
In a rapidly advancing world, the financial institution guiding the government on matters like Eurobond issuance must offer innovative solutions. This innovative approach will achieve optimal outcomes for Kenya’s Eurobond refinancing.
Partnerships and collaboration are essential for success in such endeavours. Financial institutions aim to foster sustainable economic growth and stability by working closely with the Kenyan government and stakeholders.
Kenya’s foray into the international capital markets through the Eurobond issuance is a significant chapter in its economic development story. With sound advice from trusted financial partners, Kenya can use the Eurobond to gain access to global capital, diversify its funding sources, and support sustainable economic development.
As the June maturity date approaches, confidence remains high in the appointed lease managers’ ability to guide the government in making the right decisions for a successful outcome.
