Kenya has raised Sh202 billion ($2 billion) in a new sovereign bond issue that was closed on Wednesday, the National Treasury has said.

The bond has been issued in two equal tranches of 10 years at a coupon of 7.25 per cent and 30 years at a coupon of 8.25 per cent.

The bond, which is being listed on the London Stock Exchange (LSE), was highly oversubscribed, attracting bids worth $14 billion (Sh1.4 trillion), which the Treasury says is an indication of confidence in the long term prospects of the Kenyan economy by international investors.

“The funds will be applied towards the government’s development initiatives and liability management. We will continue to invest in the infrastructure and capacity to roll out these programmes,” said the Treasury in a statement.

Existing debt

It is expected that some of the funds will go towards rolling over some of the existing international debt on Kenya’s books.

The issue was arranged by global lenders Citi, JP Morgan, Standard Bank of South Africa and Standard Chartered.

This is the second Eurobond issue by Kenya, the first being the $2.8 billion that the country borrowed in 2014 in five and 10-year tranches.

The five year paper matures in June 2019, meaning that the government been under pressure to secure funds to roll it over alongside a $750 million syndicated loan whose redemption was extended to April this year from last June.