Gov’t mulls second Eurobond as Ksh.300B repayment deadline nears
The National Treasury has moved to reassure
investors and the country that it will not default on its inaugural Eurobond
which falls due in June.
According to National Treasury Principal
Secretary Dr. Chris Kiptoo, the government is exploring all its options to
ensure that Kenya's credit rating in the international market remains intact
and attractive.
As June 1 draws close, the Treasury is
running out of time to get its act together, for what is expected to be a
defining moment for the country’s economy.
According to economic analysts, the Eurobond
repayment will either make or break Kenya’s already struggling economy.
It is this pressure that seems to have pushed
the National Treasury into considering a re-entry into the Eurobond market to
ease the pressure of a bullet repayment that could see the country pay more
than Ksh.300 billion for its inaugural issuance.
“We will settle the Eurobond...for us to
settle the Eurobond, we went out for tenders to get lead joint managers and a
legal counsel to guide us on how to deal with the matters. We now have lead counsels working with our
teams. I think today they are completing the due diligence and are completing
documentation in readiness for going to market if they determine that it is the
right timing and there is appetite for us to go to the markets,” said Dr.
Kiptoo.
Dr. Kiptoo's sentiments comes at a when the
country has seen an increase in concessional financing from the Bretton Wood Institution,
an indication of Kenya’s effort to mop up foreign currency to avoid pilling
more pressure on the shillings which continues to weaken against major global
currencies.
“We have made efforts that’s why we got
exceptional finance under DPO with the World Bank, and we have made efforts to
ensure that we raise sufficient resources to deal with the Eurobond. So I want
to tell Kenyans that, Yes, it is a big payment, bullet payment, but we think that
we should be focusing beyond June,” he noted.
The PS however remained mum on the expected
value of the issuance should Kenya decide to go back to the market and whether
it would be sufficient to fully repay the inaugural issuance.
Should Kenya opt to go back to the market it
will be the second sub-Saharan country to seek financing in the global market
this year just days after Ivory Coast raised USD 2.6 billion through the
issuance of two bonds that are expected to mature in the next 9 and 13 years
respectively.
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