The Kenyan Government is considering issuing a Eurobond with varying terms to manage next year’s maturity of its $2 billion, 10-year bond, according to the director of its debt management office in an interview with Reuters.
The move would give the country more flexibility to attract different investors and smooth out future maturities. The bond is currently trading at a yield of 11%, up from 6-7% when it was issued nine years ago.
The government’s debt-servicing costs have risen in recent years, and the country’s currency has weakened significantly against the dollar over the past three years. To attract different investors and smooth out future maturities, the bond could be structured in two or three tranches, depending on the advice received from bankers, the director of Treasury’s debt management office Haron Sirima was quoted by Reuters.
Kenya’s public debt stood at 60 percent of GDP at the end of last year. The government is about to conclude a deal to raise $600 million from a syndicate of banks, 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.
If the country sticks to the fiscal consolidation path set out by the government, Kenya’s debt-to-GDP ratio could fall significantly, according to the director of its debt management office. Public debt sustainability indicators are projected to begin improving in 2026 after settlement of major maturities. Although Kenya is classified as high risk of debt distress by the IMF and the World Bank, its debt load is sustainable, the ministry said.
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