President William Ruto has stated that Kenya is considering repurchasing a portion of its $2 billion Eurobond, as concerns mount over its ability to meet the maturing bond in June.
During an interview in Rome, the head of state mentioned that the country is exploring the option of accessing capital markets to assist in financing the repayment of the Eurobond set to mature later in the year.
The country is currently grappling challenges of dwindling hard currency reserves, a significant depreciation of the local currency, and revenue issues. These factors have raised doubts about Kenya’s capacity to fulfil its bond obligations.
“What they have recommended is we do a buyback in February, March, and then we go to the market. Thank God they were right. In fact, the markets have opened for Kenya, as it has for most other countries,” Ruto stated.
In November 2023, Ruto informed parliament that Kenya intended to repurchase $300 million of the Eurobond by the conclusion of the year. However, the government’s transaction advisors ultimately advised against pursuing this course of action.
Following a two-year increase driven by worries about significant debt and elevated interest rates in advanced economies, yields on dollar bonds issued by emerging economies have begun to decline in recent months.
Ruto additionally mentioned that the government has abandoned reliance on the Trade and Development Bank (TDB), an African development finance institution, to arrange a previously planned $1 billion syndicated loan for Kenya.
“Because of the situation that we now see in the market, we believe that it would be a lot easier even for us to raise that money in the market, rather than through syndication,” he noted.
