Kenya’s National Treasury has picked Citi and Standard Group as managers in its June 2024 maturing $2 billion (Ksh.296 billion) Eurobond.
Standard Group, a South African-based lender and America’s Citi will advise National Treasury on how to handle a $2 billion Eurobond.
Kenya needs to repay the 10-year bond at a time when the Kenya Shilling has severely shed its value against the US Dollar.
It also comes at a time when a surge in yields has effectively locked many frontier economies out of the market.
Kenya’s public debt load (currently at 67.4 percent of DGP) and weakening shilling have also fuelled concerns about the maturing bond.
Njuguna Ndung’u, Treasury Cabinet Secretary downplayed the situation, saying it is not a “big deal”.
Reuters reports that Citi and Standard will help Kenya deal with the maturity, and the Central Bank of Kenya (CBK) Governor Dr. Kamau Thugge ruled out the possibility of refinancing the Eurobond over concerns the global credit market conditions are not conducive for the issuance.
“Currently, the credit market conditions are not favourable for refinancing the Eurobond,” said Dr. Thugge.
Kenya would instead seek to repay the loan by seeking finances the World Bank, the International Monetary Fund (IMF), and regional lenders, including the African Export-Import Bank (Afreximbank).
Rising borrowing costs and tougher market conditions could mean that the government will struggle to refinance upcoming maturing debt.