The National Treasury of Kenya has begun a major liability management exercise aimed at reducing the country’s near‑term external debt pressures by offering to buy back parts of two of its dollar‑denominated Eurobonds.
The move is part of a wider strategy to smooth out repayment obligations, reduce refinancing risks and manage the country’s debt profile more sustainably.
Under the offer, which opened on February 18, 2026, the government is inviting holders to tender up to $350 million of its 8 per cent amortising notes due May 2032 and up to $150 million of its 7.25 per cent notes due February 2028.
The total amount the Treasury will spend on the buyback, including interest that has accrued so far, is capped at $500 million (about Ksh 64.5 billion).
The Republic has priced the offer at $1,055 per $1,000 of the 2032 bonds and $1,035 per $1,000 of the 2028 bonds, plus the interest earned since the last coupon payments. The premiums are intended to encourage investors to sell their holdings rather than wait until maturity. All notes that are successfully repurchased will be cancelled and not reissued.
The buyback is contingent on Kenya’s successful issuance of new U.S. dollar‑denominated notes, which the government also announced alongside the tender offer.
Proceeds from the fresh issuance are expected to finance the repurchases. Kenya plans to issue dual‑tranche dollar bonds with average maturities of around seven and twelve years.
The offer is scheduled to close on February 25, 2026, with settlement expected by March 3, 2026, if the new bond issuance goes ahead as planned. The 2028 and 2032 bonds targeted by the tender are listed on both the London Stock Exchange and Euronext Dublin.
According to the Treasury, this tender is part of proactive management of Kenya’s external debt and seeks to help “smooth out the maturity profile” of its obligations, reducing the risk that large lump‑sum payments could strain public finances.
Treasury on debt management
This is the latest in a series of debt management actions by the government over the past two years. In early 2024, Kenya repurchased parts of its $2 billion Eurobond due that year, and in March 2025, it bought back about $579 million of a 2027 bond using funds from a new $1.5 billion Eurobond issue.
Another partial buyback and refinancing was carried out in October 2025, targeting the same 2028 bond now included in this newest offer.
These operations have helped Kenya take advantage of strong global investor appetite for higher‑yield emerging market debt and may have contributed to lowering yields on some of its existing bonds, helping to ease financing costs.
The proactive liability management has also been cited as one factor behind the moderation of external liquidity pressures and improvements in foreign exchange reserves.
Credit rating agencies, including Fitch, have noted that proactive buybacks and refinancing have helped reduce some short‑term pressures on Kenya’s finances, although overall debt still carries risk.
Public debt is large relative to the size of the economy, and external debt remains partly exposed to exchange rate fluctuations and market conditions.
The government has been working with international partners, including the International Monetary Fund (IMF) and World Bank, on fiscal consolidation and debt sustainability frameworks while continuing to access international capital markets to manage and refinance its stock of obligations.
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