Eurobond will be issued when rates favourable
04 September 2013, 15:12
Nairobi - Kenya expects to have in place lead advisers for its debut Eurobond within the next two weeks but its finance minister said on Wednesday it would only tap the international debt market when it could do so at a favourable rate.
Finance Secretary Henry Rotich had told Reuters on Tuesday east Africa's biggest economy may seek as much as $2 billion, double the previously stated $1 billion, an amount bankers said could be expensive to borrow.
Rotich said they were in the final stages of appointing legal and transaction advisers.
"I think in the next one or two weeks we should have identified these key players," Rotich told a news conference, adding that preparing the paperwork and roadshows would require another one to two months.
"Next will be to decide when to enter the market. And we will be monitoring the international capital market so that when we enter the market, we do at a favorable rate."
Syndicate bankers in London say $2 billion would not be an impossible amount for Kenya to raise. But it may deepen concerns among some investors about Kenya's level of public indebtedness.
"It's a good time to go for the sovereign bond issue," Ragnar Gudmundsson, the International Monetary Fund's representative in Kenya told Reuters.
"Kenya's debt dynamics are sustainable, the debt stock is moderate, (there is a) low risk of debt distress."
Gudmundsson said the IMF estimated Kenya's net public debt to national output ratio would fall below 45 percent by 2014/15 from an estimated 46 percent at the end of the 2012/13 fiscal year.
Last month, official data showed Kenya's gross public debt hitting 52 percent of national output in the year to June.