Kenya Is Said to Pick Citi, JPMorgan to Advise on Eurobond Sale

NAIROBI (Capital Markets in Africa) – Kenya mandated four banks including Citigroup Inc. and JPMorgan Chase & Co. to manage a sale of Eurobonds planned within the next two months, according to four people familiar with the plan.

The ministry also chose Standard Chartered Bank Plc and Standard Bank Group’s Kenyan unit Stanbic Holdings to help with the sale, said the people, who asked not to be identified because the appointment hasn’t been made public yet. Treasury Secretary Henry Rotich didn’t answer two calls to his mobile Wednesday, while Treasury Director of Budget Geoffrey Mwau declined to comment when asked about planned sale on Tuesday.

The Treasury will seek to raise $1.5 billion to $3 billion in bonds, with a tenor of up 15 years, according to two of the people. JPMorgan, Citigroup, Standard Chartered and Stanbic declined to comment.

Kenya is increasing the amount of funding it raises from foreign sources as the central bank of East Africa’s biggest economy forecasts an acceleration in growth to 6.2 percent in 2018. President Uhuru Kenyatta’s administration would be joining the likes of Angola, Ghana and Nigeria seeking to sell dollar-denominated debt to capitalize on rampant demand for emerging-market assets.

Kenya’s government plans to raise $3.2 billion from external sources in the fiscal year that ends June 30, according to the Treasury’s latest budget-policy statement. The government has already raised $750 million commercially this year through a loan from a syndicate of lenders led byTrade & Development Bank.

The funds will be used to settle five-year Eurobonds maturing in June 2019, and retire a $800 million syndicated loan taken in 2016, the people said. Kenya sold $2.75 billion of Eurobonds in 2014, with $750 million maturing in 2019 and $2 billion falling due in 2024.

Yields on Kenya’s existing $2 billion of Eurobonds due in June 2024 have dropped almost 130 basis points over the past 12 months to 6.03 percent by 2:56 p.m. on Wednesday in London. The rate fell to a record low of 5.45 percent on Jan. 8.

Source: Bloomberg Business News