Kenya may opt to issue a Eurobond with a different tenor to manage next year's maturity of a $2 billion, 10-year bond, the director of its debt management office told Reuters on Friday.

Markets are keenly watching how the East African nation will manage the large maturity after the government's debt-servicing costs shot up in recent years and its currency weakened significantly against the dollar in the past three years.

"There is a likelihood that we may issue an instrument that is not of the same tenor," Haron Sirima said, adding it would be structured in two or three tranches, depending on the advice received from bankers.

Such a move could give Kenya more flexibility to attract different investors and smooth out future maturities.

The bond is trading with a yield of 11 percent, having come off a peak of 22 percent in July last year. It was trading with a yield of 6-7 when it was issued nine years ago.

The Kenyan shilling has depreciated 29 percent to 125.50 per dollar since the bond was issued, prompting concerns among market participants and government officials.

"We may not want to see such huge maturities in the future. It poses a risk. $2 billion is significant," Sirima said.

The government is about to conclude a deal to raise $600 million from a syndicate of banks, details of which were not disclosed, he said, part of the planned $900 million commercial borrowing for this financial year to the end of June.

A third of the amount has already been raised.

Kenya's debt-to-GDP ratio could fall significantly if the country sticks to the fiscal consolidation path set out by the government, Sirima said.

Public debt stood at 60 percent of GDP at the end of last year, the ministry of finance said, citing a debt sustainability analysis prepared by the International Monetary Fund (IMF) and World Bank.

"Public debt sustainability indicators are projected to begin improving in 2026 after settlement of major maturities," the ministry said in a debt management strategy published this week.

Total debt could fall below the ideal threshold of 55 percent of GDP by then, the Treasury said in the document. Although Kenya is classified by the IMF and the World Bank as at a high risk of debt distress, its debt load is sustainable, the ministry said.

(With input from Reuters)