[September 21, 2011] Treasury Plans to Raise Sh71 Billion With Eurobond Tweet Sep 21, 2011 (Nairobi Star/All Africa Global Media via COMTEX) -- Treasury may seek up to Sh71billion (US$750million) with a Eurobond by December this year, The Star has learnt. A task force to look into the floatation plans has been set up to spearhead the process and is expected to come up with a schedule and actual targeted amount in the next two weeks. John Murugu, the Director of Debt Management Department at the Ministry of Finance, told The Star yesterday that owing to the current high interest rates in Kenya, Treasury had decided to tap into the international markets and substitute some of the money it would have raised domestically. "We are going to float it this year because what we have done we have reduced our borrowing program for the year which was about 120 billion in the domestic market," Murugu said. "I think going by the steps and the calendar, the steps that are usually done in the procurement process, execution, it is likely to be either late December or early January." He spoke on the sidelines of the commencement of the trading of a Sh2.5 billion Shelter Afrique bond at the Nairobi Stock Exchange. "We have seen that considering the volatility in the rates we can now take this opportunity to go to the international market where we are hoping we are capable of mobilizing funds to substitute what we had targeted for the domestic market." A proposed US$500million Eurobond was halted in 2008. Deutsche Bank AG and Barclays Capital were the frontrunners to arrange the floatation but Murugu indicated that they may have to bid again. "It is the task force which is going to evaluate where we had reached and recommend whether it is to go on or to restart the process but considering the lapse of the time, it is likely that we may restart so that people bid again because circumstances have changed quite a bit," Murugu said. He however indicated that the amount might rise from the US$500million but was not committal whether it would hit US$1billion. "I can't give confirmation that it will be a billion but it will certainly be between 500 and maybe up to 750 but we will re-evaluate the actual amount," Murugu said. Treasury is also confident that the current weak Kenyan shilling will make gains to shield the country from making expensive foreign currency debt repayments. "We are certainly concerned about the forex exposure but we are hopeful what we are seeing in the market here is actually a temporary thing that we are going to stabilise the exchange rate and the interest rates going forward," he said. [ Back To TMCnet.com's Homepage ]