Ruto adopts new approach in borrowing foreign loans
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Ruto adopts new approach in borrowing foreign loans as he announces return to the international market to raise money
Ruto adopts new approach in borrowing foreign loans as he announces return to the international market to raise money.
The Kenyan government declared its return to the international market to raise money amid the severe cash shortage in a notification published on Monday, April 17.
The administration of President William Ruto made the announcement through Treasury that it would try to generate money by issuing foreign sovereign bonds.
A sovereign bond is a debt security that a government issues to raise money for state programs, debt repayment, interest payments on current debt, and other demands for public expenditures.
As opposed to his predecessor Uhuru Kenyatta, Ruto sought out a financial institution to represent his administration in negotiations.
“The Government of the Republic of Kenya through the National Treasury is considering accessing the international capital markets before the end of the fiscal year 2023/24 (July 1, 2023, to June 30, 2024) to issue a sovereign bond.
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“The National Treasury request for Expression of Interest (Eol) from reputable financial institutions to provide comprehensive Lead Manager services to successfully accompany Kenya’s return to international capital markets,” the Treasury stated.
According to the government, the Lead Manager must be duly licensed to operate in North America; and/or Europe; and/or Middle East; and/or Asia.
According to the government, the Lead Manager will advise the National Treasury in determining the most appropriate timing, format, amount, tenor, coupon, all-in-cost, and other relevant terms and conditions for the issuance of an international bond.
Furthermore, the Lead Manager will liaise with potential investors and manage the book-building process for the offering as well as prepare legal documents and agreements during the process.
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