A U.S. banking giant is in talks to organise a Ksh129.7 billion debt swap for Kenya as the government seeks to ease pressure from its reliance on heavy domestic borrowing.

🇰🇪 Breaking It Down

According to Bloomberg , the bank has helped the Treasury revive a deal that had stalled , with the transaction potentially involving one of Kenya's outstanding Eurobonds.

The Ksh129.7 billion debt swap is expected to form part of a Ksh700 billion external-financing programme for the financial year ending June 2027.

The programme includes a Ksh38.9 billion ($300 million) panda bond, a Ksh64.8 billion ($500 million) sukuk and a Ksh105.7 billion ($815) million eurobond sale.

📌 What You Need to Know

Plans for a debt swap first emerged in 2024 ahead of a crucial $2 billion Eurobond maturity in June that year.

At the time, the government was reported to be working with banks and investors to explore alternative financing structures that could generate debt savings for social programmes.

In September 2025, Treasury formally incorporated the strategy into its borrowing plans, detailing negotiations for a pioneering $1 billion debt-for-food security swap with the World Food Programme (WFP).

It remains unclear whether the transaction being organised by the U.S. bank is linked to the proposed debt-for-food security swap.

However,  Bloomberg reported that Kenya could channel savings generated through the transaction towards food support programmes.

The primary purpose of the latest swap is to help Treasury refinance existing debt on more favourable terms, according to  Bloomberg .

📰 Source: Kenyans.co.ke