NAIROBI – Kenya has not yet decided how to manage a $2 billion Eurobond maturing in June next year and is taking advice from external experts, the finance minister said on Monday.
Repaying the bond is seen as a key test of the East African nation’s nine-month-old government, after surging yields last year blocked Kenya’s access to international capital markets.
“There are diverse ways of liability management and we will rely on the lead manager to advise the road towards the resolution of Eurobond June 2024,” Njuguna Ndung’u told Reuters.
“We do not wish to pull the rug (from) under this expert’s feet.”
The identity of the lead manager has not yet been disclosed.
There are several options: a partial buy-back, a full buy-back or a maturity extension through a switch to a new issue, said Haron Sirima, the head of the debt management office at the ministry.
“It is premature for one to really take a position as to what option we are going to take,” Sirima said, adding that each had advantages and disadvantages and had to be weighed carefully.
Other options included potentially re-gaining access to the market if tight credit conditions globally start to ease, Sirima said, and bond exchanges.
Another solution could involve Kenya’s development partners paying off the debt, Sirima said, in return for the government funding an agreed number of development projects.
“We have proposals to that effect,” he said.
Kenya’s lack of access to the Eurobond market has been compounded by growing repayments of other debts, slower than expected revenue growth and other shocks like drought, putting government finances on shaky ground.
Source : Zawya