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Kenya has picked Trade and Development Bank (TDB) and Standard Bank Group Ltd to help it raise $1 billion syndicated loans.

According to a Bloomberg, the president of TDB, Admassu Tadesse, confirmed the report saying, “We have that mandate alongside Standard Bank.”

A syndicated loan is a loan facility offered by several lenders to one borrower. Syndicated loans are offered in instances where the loan amount is too big to be issued by one lender.

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The loan will come in three tranches; $250 million 10-year debt, $410 million 7-year debt, and € 300 million 7-year debt. Money raised through the syndicated loan will be used to repay existing loans and fund some projects. The country is expected to repay $2 billion worth of debt in 2019, and $1.28 billion in 2020.

Kenya’s treasury plans to raise $2.8 billion in the financial year 2018/2019 through external borrowing to bridge its fiscal deficit gap. In addition to the $1 billion syndicated loan, the country is in discussions to issue a $2.5 billion Eurobond.

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