(Bloomberg) -- Kenya appointed Trade and Development Bank and Standard Bank Group Ltd. to arrange syndicated loans of $1 billion.
“We have that mandate alongside Standard Bank,” Admassu Tadesse, the president and chief executive of TDB, as the lender is known, said Thursday by phone from the East African nation's capital, Nairobi. The bank plans to raise the financing by April, he said without giving further details of the loan.
There will be three tranches -- a $250 million 10-year debt and two seven-year loans of $410 million and 300 million euros ($340 million), a person with knowledge of the transaction said separately. The proceeds will be used to refinance loans, and fund some projects in the national budget, the person said, asking not to be identified because they are not authorized to comment on the matter.
The transaction features an accordion option to raise an additional $250 million that will be used to help finance projects under the 2018-19 budget, the person said.
Kenya's Treasury planned to raise about 280 billion shillings ($2.8 billion) of external debt to help plug the 2018-19 budget shortfall. That's even as more than $2 billion of debt is maturing this year, and $1.28 billion in 2020, according to government documents.
The government is talking to banks separately to arrange a $2.5 billion Eurobond-offering, probably during the first quarter, Reuters reported on Wednesday.
To contact the reporter on this story: Adelaide Changole in Nairobi at achangole2@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Rene Vollgraaff
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