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Kenya Eurobond - Dummy Bookrunning
Rank: Member Joined: 1/1/2011 Posts: 396
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Hey all? Want to create a book on the Eurobond to see what pricing you would offer? Disclaimer: This post is not in any way intended to be a forum for financial advice, rather a social experiment to see whether or not a motley team of interested investors can arrive at pricing similar to what Investment Bankers would get to (sans the sweet commission ofcourse)!
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Rank: Member Joined: 1/1/2011 Posts: 396
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OK. To start off the process, Kenya has basically issued 30-year debt at 2% over Libor with a 4 year moratorium for a KES320B project (Railway). Currently, 90-day Libor is approx. 0.18%....projected to hit 2% in 2017. I would imagine that the Eurobond would need to be lower than this rate (4% implied rate) particularly since, it has no project performance risk attached to it.
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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What is a realistic bid price for the current CBK Bond? Foresight..
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Eurobond will be 6%-7%... Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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guru267 wrote:Eurobond will be 6%-7%... Thanks Guru I meant the cbk 10yr one really Foresight..
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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gatoho wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks Guru I meant the cbk 10yr one really you mean the syndicated loan?
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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gatoho wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks Guru I meant the cbk 10yr one really btwn 12.25-12.55% possunt quia posse videntur
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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maka wrote:gatoho wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks Guru I meant the cbk 10yr one really btwn 12.25-12.55% Grazie Maka.. Foresight..
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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 kizee1 wrote:gatoho wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks Guru I meant the cbk 10yr one really you mean the syndicated loan?  Foresight..
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Rank: Member Joined: 1/1/2011 Posts: 396
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guru267 wrote:Eurobond will be 6%-7%... Thanks for your input. I was attempting something slightly different here, though. What would YOU truly demand for a loan to govt. of Kenya in foreign currency, i.e. Eurobond. I was trying to get the views of a range of Kenyan investors (both based locally and diaspora), who have a close view of Kenya due to having invested / lived here over a long period. So to re-frame: If you had, say an investment portfolio of USD10MM, and maybe 10%-20% of it was targeting EM bonds. How much of it would you commit to this Eurobond and what rate would you demand for you to feel you're getting an adequate return? For me, I'd probably be okay bidding USD1MM at 5.5%. Anything above that would be cream on top. So if it comes out at 7%, I'd be quite pleased with this outcome! Wazuan thoughts?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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jmbada wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks for your input. I was attempting something slightly different here, though. What would YOU truly demand for a loan to govt. of Kenya in foreign currency, i.e. Eurobond. I was trying to get the views of a range of Kenyan investors (both based locally and diaspora), who have a close view of Kenya due to having invested / lived here over a long period. So to re-frame: If you had, say an investment portfolio of USD10MM, and maybe 10%-20% of it was targeting EM bonds. How much of it would you commit to this Eurobond and what rate would you demand for you to feel you're getting an adequate return? For me, I'd probably be okay bidding USD1MM at 5.5%. Anything above that would be cream on top. So if it comes out at 7%, I'd be quite pleased with this outcome! Wazuan thoughts? I would throw in USD1M also but at 7%... Mainly because Kenya is rated B+ and AAA bond rates are rising fast this year and beyond! Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 1/1/2011 Posts: 396
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guru267 wrote:jmbada wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks for your input. I was attempting something slightly different here, though. What would YOU truly demand for a loan to govt. of Kenya in foreign currency, i.e. Eurobond. I was trying to get the views of a range of Kenyan investors (both based locally and diaspora), who have a close view of Kenya due to having invested / lived here over a long period. So to re-frame: If you had, say an investment portfolio of USD10MM, and maybe 10%-20% of it was targeting EM bonds. How much of it would you commit to this Eurobond and what rate would you demand for you to feel you're getting an adequate return? For me, I'd probably be okay bidding USD1MM at 5.5%. Anything above that would be cream on top. So if it comes out at 7%, I'd be quite pleased with this outcome! Wazuan thoughts? I would throw in USD1M also but at 7%... Mainly because Kenya is rated B+ and AAA bond rates are rising fast this year and beyond! Thanks. Any other takers / bids? Remember, when, bidding, we're assuming you're ACTUALLY looking for yield and if you're too demanding on the yield, you're bid will be rejected outright! ...................
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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jmbada wrote:guru267 wrote:jmbada wrote:guru267 wrote:Eurobond will be 6%-7%... Thanks for your input. I was attempting something slightly different here, though. What would YOU truly demand for a loan to govt. of Kenya in foreign currency, i.e. Eurobond. I was trying to get the views of a range of Kenyan investors (both based locally and diaspora), who have a close view of Kenya due to having invested / lived here over a long period. So to re-frame: If you had, say an investment portfolio of USD10MM, and maybe 10%-20% of it was targeting EM bonds. How much of it would you commit to this Eurobond and what rate would you demand for you to feel you're getting an adequate return? For me, I'd probably be okay bidding USD1MM at 5.5%. Anything above that would be cream on top. So if it comes out at 7%, I'd be quite pleased with this outcome! Wazuan thoughts? I would throw in USD1M also but at 7%... Mainly because Kenya is rated B+ and AAA bond rates are rising fast this year and beyond! Thanks. Any other takers / bids? Remember, when, bidding, we're assuming you're ACTUALLY looking for yield and if you're too demanding on the yield, you're bid will be rejected outright! ................... Rem last year Rwanda issued a 10 year bond,$400 million with a coupon of 6.625% the small amount (as compared to what we are asking for) made it attractive...now if we combine the tenor,the amount and other external factors il go with 7.25% to 7.75%... possunt quia posse videntur
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Rank: Hello Joined: 7/14/2014 Posts: 2
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That is interesting. It can start with $1.
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