Uhuru campaigned on an anti-West platform. They said they will face East, but soon exhausted their Chinese credit limit, plus China is doubtful about Kenya’s ability to meet more debt obligations. So Jubilee resorted to Eurobond, part of which they cannot account for. If China doubts your ability to pay, that’s interesting, coz they lend even some of the wartorn and failed states.
Jubilee has been reduced to borrowing from a South African Bank(Standard), StanChart, Citibank. Jubilee has lost so much credibility that it approached the local bank managers of those 3 banks, who then organized for a syndicated loan. Syndicated only means that you’re given a loan by so and so who gets it guaranteed by so and so, who again asks so and so to give the money.
Syndicated is just a legal jargon that establishes a legal basis to call it “foreign borrowing”, because the loan doesn’t come from StanChart’s Kenyan legal entity or Capital but rather from its greater global conglomeration. It’s however difficult to establish whether Barclays refused, and its place taken by a South African bank.
In essence a broke and desperate Jubilee sent CS Rotich to approach bank managers just like mwananchi would, but while processing the loan which would have driven the local interest rates sky high, a bank teller at Stanbic Kimathi branch who was concerned about rising interest rates whistle blew and soon the media and CORD was breathing down Jubilee necks over inflation and interest rates.
It’s at this point that the South Africans and the Britons advanced the concept of Syndicated, and assured them that it will be called foreign borrowing. And so syndicated was a second thought after a public uproar over local interest rates. In simple terms, Jubilee borrowed from South Africa. Once u start hearing Uganda come up, then it’s time to run.
Otherwise it’s just local borrowing, in a manner that doesn’t shake up the interest rates. It’s just a desperate measure, last resort before they borrow from Equity.
So Jubilee made sure the signatory was the mother banks of the banks on Kimathi, Upper Hill, and so on. So the local bank representatives talked to their Superiors abroad, to give them an incentive to secure business.