A third of the amount has already been raised.
Kenya's debt-to-GDP ratio could fall significantly if the
country sticks to the fiscal consolidation path set out by the
government, Sirima said.
Public debt stood at 60% of GDP at the end of last year, the
ministry of finance said, citing a debt sustainability analysis
prepared by the International Monetary Fund (IMF) and World
Bank.
"Public debt sustainability indicators are projected to
begin improving in 2026 after settlement of major maturities,"
the ministry said in a debt management strategy published this
week.
Total debt could fall below the ideal threshold of 55% of
GDP by then, the Treasury said in the document. Although Kenya
is classified by the IMF and the World Bank as at a high risk of
debt distress, its debt load is sustainable, the ministry said.
(Reporting by Duncan Miriri Editing by Mark Potter)
(Adds details)
By Duncan Miriri
NAIROBI, Feb 17 (Reuters) - Kenya may opt to issue a
Eurobond with a different tenor to manage next year's maturity
of a $2 billion, 10-year bond, the director of its debt
management office told Reuters on Friday.
Markets are keenly watching how the East African nation will
manage the large maturity after the government's debt-servicing
costs shot up in recent years and its currency weakened
significantly against the dollar in the past three years.
"There is a likelihood that we may issue an instrument that
is not of the same tenor," Haron Sirima said, adding it would be
structured in two or three tranches, depending on the advice
received from bankers.
Such a move could give Kenya more flexibility to attract
different investors and smooth out future maturities.
The bond is trading with a yield of 11%,
having come off a peak of 22% in July last year. It was trading
with a yield of 6-7% when it was issued nine years ago.
The Kenyan shilling has depreciated 29% to 125.50 per dollar
since the bond was issued, prompting concerns among market
participants and government officials.
"We may not want to see such huge maturities in the future.
It poses a risk. $2 billion is significant," Sirima said.
The government is about to conclude a deal to raise $600
million from a syndicate of banks, details of which were not
disclosed, he said, part of the planned $900 million commercial
borrowing for this financial year to the end of June.
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