Kenya is seeking a help from commercial banks to pay part of the Sh200 billion debt that falls due this year after Treasury opted against tapping the Eurobond market again.
Half of the amount could be disbursed as early as next month in the form of a syndicated loan that the Trade and Development and Standard banks are arranging on behalf of the government.
Kenya is staring at a Sh78.7 billion maturity next month of a loan advanced to it by Stanchart, Standard, Citi and Rand Merchant banks in March 2017, at a rate of eight per cent.
The government is expected to remit the principal of Sh81.6 billion and accumulated interest of Sh13 billion.
It emerged that TDB reached out to several financial institutions asking them to express interest to participate in the syndicate through book-building, which closed on Wednesday. TDB president Admassu Tadesse said the bank plans to raise the financing by April.
“The players have met some banks and agreed on this, including key terms of the loan syndication,” he said.
“Some banks have responded to the negative on the call to participate.”
Kenya is seeking loans with maturity of between seven to 10 years.
A source at Standard Bank confirmed its role as a “co-arranger” but declined to say what amount and tenor the bank would be looking at.