Kenya’s government has requested the services of a lead counsel and lead manager, setting in motion plans to issue a $1 billion sovereign bond in the international markets this year.

(Read: Treasury to issue Kenya’s first eurobond in September)
The National Treasury on Tuesday placed advertisements in local newspapers seeking the professional services ahead of the issuance of the bond whose proceeds it said will primarily be used to finance infrastructure projects.

“The Government of the Republic of Kenya through The National Treasury is considering accessing the international capital markets by the second half of calendar year 2013 to issue a sovereign bond. The targeted amount is provisionally set at $1 billion,” reads the advertisement.

The lead counsel will advise on United States and European securities law relating to disclosures, liability, negotiation of contractual arrangements with lead managers and book runners and the preparation of legal and disclosure opinions among other requirements.
The lead manager will assist in the determination of the timing, format, amount, tenor, coupon and best pricing scheme, arranging of road shows and conference calls to update investors and the completion of listing and rating procedures among other requests.

BNP Paribas and Citigroup were the joint lead managers for Rwanda’s $400 million Eurobond which was issued and listed at the Irish Stock Exchange two months ago.

“The government should consider dual listing the bond. If for example it is listed on the London Stock Exchange, it should also be listed on the Nairobi Securities Exchange because it will give our capital markets a push,” said Jimnah Mbaru, chairman, Dyer & Blair Investment Bank.

Kenya’s government has been indicating that part of the money is may be used to pay off some of its more expensive debt.

Mid last year, the government borrowed $600 million through a syndicated loan from 13 international banks such as The Hong Kong and Shanghai Banking Corporation, FBN Bank, Bank of India, BankMuscat and British Arab Commercial Bank.
The loan was priced at a premium of 4.75 per cent above the London Interbank Offered Rate (Libor).

It also borrowed €65 million last year from Standard Chartered Bank to be paid at the rate of 5.12 per cent over a period of 10 years to finance the acquisition of biometric voter registration (BVR) kits.