(Adds analysts comment)
By Duncan Miriri
NAIROBI, June 17 (Reuters) - Kenya secured bids worth $8.8 billion for its debut Eurobond and will accept $2 billion, a senior Kenyan official said on Tuesday, saying the level of bids was a record for Africa.
Bankers had said the final level of demand was nearer $8 billion, with the 10-year dollar denominated bond attracting $5.5 billion and the five-year bond receiving $2.5 billion.
The senior official, who asked not to be named, told Reuters that the five-year bond had a yield of 5.875 percent while the 10-year portion came with a yield of 6.875 percent.
Analysts said the outcome reflected the abundance of liquidity in global financial markets chasing yields, as well as showing that confidence in Kenya’s diversified economy trumped worries about attacks by Somali-linked Islamist militants.
“It shows that Kenya is a strategic investment destination despite the security situation. They (foreign investors) have faith in our currency,” said a Nairobi-based bonds trader.
The Kenyan government has said proceeds of the Kenyan bond will be used to repay an existing syndicated $600 million loan and finance infrastructure projects.
“There is lots of liquidity around - there is appetite for issuers than can offer yields,” said Colm McDonagh, head of emerging market fixed income at Insight Investment.
“You have to discriminate between the different types of credit - Kenya is an improving credit, you can see that (deal) makes sense.”
Additional reporting by Carolyn Cohn in London; Editing by Edmund Blair and Alison Williams