Yields on Kenyan Eurobonds have seen a notable decline, marking a shift in investor sentiment as concerns surrounding the country’s debt obligations ease. The interest rates on various Eurobond issues have dropped into single-digit territory, reflecting a more favorable outlook for Kenyan sovereign assets in global financial markets.
This positive trend follows the partial payment of the debut Eurobond, with yields on the Eurobond maturing in June dropping to 9.93 percent as of Monday’s close, down from a high of 15.09 percent recorded earlier in February. Similar decreases have been observed across other Eurobond maturities, including those maturing in 2027, 2028, 2032, 2034, and 2048.
Analysts attribute the falling yields to a recalibration of risk perceptions by investors, who are now more optimistic about Kenya’s ability to meet its debt obligations. Last week, the National Treasury initiated a buyback of notes from the 2014 Eurobond, a move that has helped alleviate concerns and reduce the remaining balance to be cleared on June 24.
This buyback represents Kenya’s first step towards implementing liability management operations, which are seen as crucial for effective debt management, especially for external debt. Plans to leverage debt swaps and buybacks are part of broader public debt management reforms outlined by the National Treasury.
Despite the premium paid for the buyback and the higher rate offered on the new bond, investor interest in Kenyan assets is on the rise. The influx of dollars into the market following the new issuance has improved forex liquidity, leading to significant gains for the Kenya Shilling against the US dollar last week.
In summary, Kenya’s Eurobond yields are signaling a more positive outlook, reflecting growing investor confidence in the country’s fiscal management amidst ongoing efforts to address debt concerns.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
22nd February, 2024
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
