President William has disclosed that Kenya received interest on its recent Eurobond worth an overwhelming $6.2 billion(Sh985 billion).
However, Ruto said his administration decided to issue a Eurobond worth $1.5 billion (Sh238 billion) to buy back the inaugural one due on June 24.
Addressing the press in Naivasha after the end of a three-day government retreat, Ruto said that although the Eurobond was oversubscribed, his administration resisted the attempt to go into a borrowing spree.
“The amount we received as people interested in our Eurobond is not Sh1.4 billion dollars but it is 6.2 billion dollars, but we chose 1.5 billion dollars,’’ Ruto said.
The President said that the amount accepted was the one needed at the moment to plug in to reduce the exposure the country is in.
“It is our commitment that we are going to be prudent in any borrowing that we engage in as a government and our overall strategy is to reduce our debt stock, enhance our local revenue-raising measures and reduce our expenditure so that we live within our means,” he said.
The president was responding to a question that the country’s recent Eurobond would have been shunned at the international market with an undersubscription.
In a statement, the National Treasury said the new loan divided into three instalments has a weight average life of six years and is expected to mature in 2031.
The bond was priced at 10.37 per cent, the highest rate an African state has ever offered.
"The proceeds of the 2023 Eurobonds will fund the offer to buy Kenya's existing $2 billion Eurobonds due in 2024, pending demand in the tender offer whose results are expected February 15,'' the exchequer said.
It said that the combined transactions are a crucial part of the government strategy to smoothen the maturity profile of the 2024 Eurobonds and proactively manage debt liabilities.
The remaining portion of the 2024 Eurobonds not purchased in the Tender Offer will be funded through a mix of government funds and financing from multilateral and bilateral sources, including bank syndication.
"This diversified financing approach aims to maintain a relatively low weighted average interest rate in the overall public debt portfolio, ensuring Kenya's debt sustainability over the medium term.''
The National Treasury added that the international capital markets provide essential liquidity for the government, and the successful transaction underscores investor confidence in Kenya.
The new debt came in just a week after Kenya opened the tender offer for bondholders wishing to participate in the buyback for its inaugural Eurobond issued in 2014.