Kenyan economy to expand 6.4 pct in 2015 - Eurobond document

President Kenyatta

Kenya's economic growth will rise to 6.4 percent in 2015 from a forecast 5.8 percent this year while inflation in 2014 will be around 7.5 percent, according to a preliminary prospectus for Kenya's debut Eurobond.
"Inflation will remain in the upper limit target of 7.5 percent in 2014," said the prospectus, seen by Reuters on Thursday. Kenyan inflation increased to 7.30 percent in the year to May from 6.41 percent a month earlier.
The preliminary prospectus did not give the size, tenor or other details about the Eurobond, which is expected to raise up to $2 billion and for which an investor roadshow began on Thursday.
Yerlan Syzdykov, head of emerging markets, bond and high yield at Pioneer Investments, said investors are likely to be willing to overlook political risks associated with east Africa's largest economy if the yield on the bond is appealing.
"We will be assessing the creditworthiness of the country, but given how tight this market is, very much driven by lack of growth stories or yield stories, Kenya will be popular if it is priced reasonably," Syzdykov told a briefing this week.
The Eurobond document said Kenya's cabinet approved the 2014/2015 budget on April 28, allocating 116.7 billion shillings ($1.33 billion) for on-going and new road projects and 43.6 billion to energy-related initiatives.
The budget also estimated the net public debt to GDP ratio will decline from 52.1 percent at the end of this month to 49.8 in 2016/2017.
The government will formally unveil details of the next fiscal year's budget next Thursday.