Kenya Says in Final Stages of Arranging $600 Million China Loan

  • Nation assessing investor interest for 2016-17 Eurobond issue
  • Kenya's debut Eurobond issue raised $2.82 billion in 2014

Kenya is in the final stages of arranging $600 million in concessional Chinese bilateral funding for this financial year and is holding roadshows in Europe and the U.S. to assess appetite for a second Eurobond issue, Treasury Secretary Henry Rotich said.

A no-deal roadshow in London met huge investor interest, Rotich told reporters in the capital, Nairobi, after signing a 1.8 billion shillings ($17.7 million) water supply deal with Belgium.

“There is lots of interest because Kenyan growth is very strong,” Rotich said. “The economy is benefiting from low oil prices and is not affected by the drop in commodity prices. This has been enhanced by the current account deficit coming down.”

East African’s biggest economy plans to cut net spending for the financial year through June 2016 by 41 billion shillings as it expects a revenue shortfall of 46.7 billion shillings. Total spending is, however, expected to grow by 2.3 percent, according to a supplementary budget presented to lawmakers last month.

Kenya’s external public debt was $15.8 billion at the end of 2015, according to Treasury statistics, below the government’s $28 billion ceiling. In 2015, the government raised $750 million in a syndicated loan as lower-than-expected revenue collection squeezed its finances.

In 2014, Kenya borrowed $2.82 billion in its first Eurobond. Yields on that dollar-bond due June 2024 stood at 7.6 percent on Thursday.

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