Kenya faces Ksh.259.3 billion debt maturity in June as yields on Eurobond record mixed performance

The yields on Eurobonds recorded a mixed performance in the week ended March 10, when performance on the 12-year Eurobond issued in 2019 recorded the most significant gain, having increased by 0.3% points to 11.3% from 11.0% recorded the previous week.

The 10-year Eurobond issued in 2014 on the other hand, recorded the largest decline of 0.6 percent points to 11.8% from 12.4%, recorded the previous week.

World Bank data, with adjustments by Fitch Ratings, indicate that total external debt service payments due next year among Fitch-rated SSAx sovereigns (Sub-Saharan Africa excluding South Africa) will reach Ksh.2.8 trillion ($22.3 billion), up from Ksh.2.7 trillion ($21.4 billion) in 2022.

Refinancing conditions are currently challenging for low-rated sovereigns including Kenya, against a backdrop of rising interest rates in most developed markets.

Kenya, with a B rating, has been deemed as stable and is facing a large Eurobond bullet maturity of Ksh.259.3 billion ($2 billion) come June 2024.

Ethiopia follows it, currently rated CCC (under criteria observation) which is faced with Ksh.129.6 billion ($1 billion) in maturities come December 2024.

This even as the Kenya Shilling continued to go under against the dollar, having depreciated by 1.1% to close the week at Ksh.128.9, from Ksh.127.5 recorded the previous week.

It has slumped to its lowest in history to trade at 129.6 units against a dollar.

The weaker shilling is partly attributable to increased dollar demand from importers, especially oil and energy sectors against a slower supply of hard currency.

On a year-to-date basis, the shilling has depreciated by 4.4% against the dollar, adding to the 9.0% depreciation recorded in 2022.

The trend will likely shoot up debt servicing costs for Kenya. The country is mulling issuing another tenure to give it more flexibility to attract different investors and smooth out future maturities.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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