Kenya makes u-turn on $2.0 billion (Sh309.9 billion) Eurobond payment
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Government of Kenya backs out on payment pledge to redeem portion of Eurobond by December 31
Government of Kenya backs out on payment pledge to redeem portion of Eurobond by December 31.
Kenya will not pay the first instalment of its $2.0 billion (Sh309.9 billion) Eurobond loan in advance this month, as earlier planned, with the government now awaiting advice from the lead arrangers on a new date next year.
This comes after during the November 9 State of the Nation Address, President William Ruto said a $300.0M buyback on the $2.0 billion Eurobond would be executed in December.
However, National Treasury Cabinet Secretary Njunguna Ndugu says the government of Kenya has made a payment of Sh10.8 billion in interest on its $2 billion Eurobond, ditching its initial plan for a USD300 million buyback .
Kenya had until December 24 to make the payment for the debt. The 10-year bond priced at 6.78 percent was issued in 2014 to fund infrastructure projects under the former Jubilee administration.
In a statement to newsrooms on Thursday, Njunguna said the timely payment ‘underscores Kenya’s steadfast dedication to meeting external obligations.’
The CS boosted that Kenya maintains a robust economic outlook supported by policy reforms and collaborations with multilateral and bilateral development partners.
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He cited “substantial external inflows from the World Bank, IMF, and other Development Finance institutions, in addition to key bilateral partners.”
Njuguna explained that since July 2023, the government has diligently implemented a comprehensive plan for debt service payments, combining revenue and concessional financing to retire high-cost debts within the national debt portfolio.
“The ongoing fiscal consolidation plan, driven by revenue generation, aims to curtail borrowing, reduce debt levels over the medium term, and ultimately enhance the well-being of Kenyans,” he stated.
The CS stated that the final coupon payment will be made alongside the maturity in the last week of June 2024.
Njuguna however did not mention anything about its pledge to repurchase the securities.
“The final interest payment on this Eurobond is scheduled for the last week of June 2024, alongside the repayment of the principal amount of $2 billion,” Ndung’u said.
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