Govt Makes U-turn Pledge To Redeem Portion Of Eurobond By December 31

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Govt Makes U-turn Pledge To Redeem Portion Of Eurobond By December 31

Njunguna Ndugu, the National Treasury Cabinet Secretary, announced that the government has fulfilled a payment of Sh10.8 billion in interest on its $2 billion Eurobond, deviating from its initial intention to engage in a USD300 million buyback.

The deadline for the debt payment was December 24. The 10-year bond, issued in 2014 at a 6.78 percent interest rate, was intended to finance infrastructure projects during the former Jubilee administration.

In a statement released on Thursday, Njunguna emphasized that the punctual payment highlights Kenya’s unwavering commitment to meeting its external financial obligations.

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The Cabinet Secretary proudly stated that Kenya’s economic outlook remains strong, supported by policy reforms and collaborative efforts with both multilateral and bilateral development partners.

He pointed out the significant influx of external funds from entities such as the World Bank, IMF, and other Development Finance institutions, as well as vital collaborations with bilateral partners.

Njunguna clarified that since July 2023, the government has diligently executed a comprehensive plan for servicing its debt, utilizing a combination of 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 Cabinet Secretary (CS) declared that the ultimate coupon payment is scheduled to be executed concurrently with the maturity, slated for the last week of June 2024.

Nevertheless, Njuguna did not provide any information regarding the government’s commitment 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.

In his State of the Nation Address on November 9, President William Ruto announced that a buyback of $300.0 million on the $2.0 billion Eurobond would be carried out in December.

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Govt Makes U-turn Pledge To Redeem Portion Of Eurobond By December 31

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