Kenyan Treasury Considering Selling Bonds by Private Placement

NAIROBI (Capital Markets in Africa) – Kenya’s Finance Ministry is considering offering debt through a private placement.

The Treasury invited fund managers and insurers to a July 6 meeting for a “market-sounding exercise,” according to a June 29 letter signed by Daniel Ndolo, director of debt policy strategy and risk management. Participants will “discuss and agree on the schedule of activities towards the issuance” of bonds by private placement along with pricing methodology, according to the letter, which was confirmed by Treasury spokesman Maina Kigaga.

The bulk of the nation’s domestic debt is held by commercial banks. Habil Olaka, the chief executive officer of the Kenya Bankers Association, said by phone on Tuesday that neither the lobby group nor its members have been invited to the discussions. Kenyan Fund Managers Association Chairman Einstein Kihanda said he wasn’t immediately available to comment.

Kenyan banks held 1.23 trillion shillings ($12.2 billion) of debt at the end of March. Pension funds held 641.8 billion shillings, while insurance companies had 150.9 billion shillings, according to data from the Central Bank of Kenya and the Treasury.

In the 11 months of the fiscal year that began July 1, 2017, Kenya had net domestic borrowing of 330.2 billion shillings and spent 443 billion shillings on debt servicing.

Source: Bloomberg Business News