MON, FEB 12 2024-theGBJournal|Kenya is preparing to re-enter the international bond market to raise funds for a buyback of its $2 billion Eurobond, easing concerns about repayment.
The unexpected move diverges from previous plans to use reserves or loans for the buyback. The Treasury has opened a tender for bondholders to participate, pricing the buyback at face value.
Investors reacted positively, with yields dropping significantly, indicating reduced risk perception.
Kenya’s absence from the Eurobond market since 2021 contrasts with Ivory Coast’s successful issuance, prompting Kenya’s swift action to capitalize on potentially favorable rates.
The maturing Eurobond and limited access to external debt have strained the Treasury, prompting a reliance on IMF loans and reserves for repayment.
The buyback plan offers a solution, while the new bond issuance presents an opportunity to address the budget deficit. With no cap on the buyback value, Kenya aims to determine allocation based on demand.
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