Kenya Initiates Buyback of 2027 Eurobond to Manage Debt Profile
Kenya has launched a buyback offer for its $900 million Eurobond maturing in May 2027, aiming to enhance its debt maturity profile. The buyback offer runs until March 3, with a price of $1,002.50 per $1,000 principal. The Eurobond improved in value post-announcement, reflecting positive investor sentiment. Results will be available on March 4 and settlement on March 10.
On Monday, Kenya’s government initiated a buyback offer for its $900 million Eurobond set to mature in May 2027, as disclosed in a regulatory filing. To finance this buyback, the government plans to issue a new bond, aiming to improve the maturation profile of its external debt obligations. The buyback offer is available until March 3, offering a purchase price of $1,002.50 for every $1,000 in principal.
Following the announcement of the buyback, the Eurobond experienced a slight increase, trading up approximately 0.58 cents to achieve a bid price of 99.23 cents in the dollar. This action comes after Kenya successfully alleviated concerns about potential defaults last year by issuing a $1.5 billion bond, which facilitated the partial buyback of a $2 billion bond. This debt management effort significantly contributed to a rally in the Kenyan shilling currency last year.
The results of this tender offer are anticipated to be released on March 4, with the settlement date scheduled for March 10.
In summary, Kenya’s government has announced a buyback offer for its upcoming Eurobond as part of its strategy to manage its external debt more effectively. By financing the buyback with a new bond, the government aims to stabilize its debt maturity profile while addressing investor concerns over potential defaults. The Eurobond’s positive market response further demonstrates investor confidence in these measures.
Original Source: www.tradingview.com
