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Kenya’s Ruto reveals plans for Eurobond buyback in Feb/March

Published

10 months ago

January 31, 2024

President William Ruto of Kenya told journalists on Tuesday that the country was trying to buy back at least some of its $2 billion Eurobond in February or March, putting an end to any possibility that it would default.

Kenya’s capacity to repay the bond, which matures in June, has come under scrutiny due to declining hard currency reserves, a sharp decline in the value of the local currency, and revenue difficulties.

Ruto said that although the government’s transaction consultants had eventually advised against it, Kenya would buy back $300 million of the Eurobond before the end of 2023, as he had assured the parliament in November.

“What they have recommended is that we do a buyback in February or March, and then we go to the market,” he said in an interview in Rome on the sidelines of the Italy-Africa summit.

“Thank God they were right. In fact, the markets have opened for Kenya, as they have for most other countries,” Ruto said.

The yields on dollar bonds issued by frontier nations have begun to decline in recent months, following a two-year surge driven by worries about high interest rates and heavy debts in advanced economies. With two oversubscribed bonds this month, Ivory Coast was able to raise $2.6 billion.

Additionally, as previously announced, Ruto stated that the government was no longer depending on the Trade and Development Bank (TDB), an organisation that provides development funding in Africa, to arrange a $1 billion syndicated loan for Kenya.

The remaining monies had not yet been provided, according to the finance minister of Kenya, who stated earlier this month that TDB had lent Kenya $210 million of the total.

“Because of the situation that we now see in the market, we believe that it would be a lot easier for us to raise that money in the market rather than through syndication,” Ruto said.

Related Topics:Eurobond Featured Kenya president William Ruto

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IMF mission concludes 4th loan program assessment in Egypt

Published

20 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.