Kenya $1.35B Eurobond (2039) set at 8.7% – Finance Ministry
TL;DR
Kenya issued a $1.5 billion Eurobond at 8.7% to refinance debt and extend maturities, attracting strong investor demand. Despite lower borrowing costs, debt sustainability concerns persist due to high public debt and political challenges.
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Kenya $1.35B Eurobond (2039) set at 8.7% – Finance Ministry
Kenya Issues $1.5 Billion Eurobond to Refinance Debt, Cut Costs
Kenya’s finance ministry announced on February 18, 2026, the successful issuance of a $1.5 billion Eurobond with an 8.7% coupon, maturing in 2039, as part of its ongoing debt management strategy according to GlobalCapital. The bond, structured as a combination of 7-year and 12-year tranches with yields of 7.875% and 8.8% respectively as reported by Reuters, aims to extend debt maturities and reduce refinancing risks. The offering attracted over $7.5 billion in investor demand, reflecting strong market confidence despite Kenya’s elevated debt levels.
The proceeds will be used to repurchase existing debt, including a $500 million buy-back program, and refinance maturing Eurobonds. This follows similar efforts in 2024 and 2025, when Kenya issued $1.5 billion Eurobonds at higher yields (10.375% and 9.95%) to address short-term liquidity needs as Credendo notes. The current issuance benefits from slightly lower borrowing costs compared to earlier this year, according to Treasury Secretary Chris Kiptoo, though yields remain elevated relative to historical averages.
Kenya’s debt sustainability remains a concern, with public debt reaching 70% of GDP in 2025 and interest payments consuming nearly 29% of annual revenues over 2024–2028 as Credendo reports. Despite improved foreign exchange reserves—boosted by recent bond sales—the country’s external debt exceeds four times its annual current account receipts according to Credendo analysis. Political challenges, including the withdrawal of a controversial 2024 Finance Bill amid public protests, have further complicated fiscal reforms and delayed IMF program renewals as Credendo indicates.
For investors, the 2039 Eurobond offers exposure to a high-yield emerging market debt issuer with a track record of proactive refinancing. However, risks persist, including political instability, a narrow export base, and vulnerability to global interest rate trends. Analysts note that while the issuance provides short-term relief, structural reforms remain critical to addressing long-term debt vulnerabilities.
Reuters, October 2025: Reuters, October 2025
GlobalCapital, February 2026: GlobalCapital, February 2026
Credendo, February 2025: Credendo, February 2025
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