Kenya plans to borrow $4.6 billion to help plug a 9.3 percent budget deficit – Rotich

Bloomberg : Kenyan Treasury Secretary Henry Rotich said he’s likely to meet potential investors in the East African nation’s next Eurobond while visiting the U.S. next month.

The government has also factored a possible U.S. Federal Reserve interest-rate hike later this year into its plans for selling more debt offshore, he said in an interview Tuesday in the capital, Nairobi. Rotich will be attending the International Monetary Fund annual meetings in Washington scheduled to take place Oct. 7-9.

“There will be side meetings and I need to give them progress” reports on Kenya, Rotich said.

The country raised $2.82 billion in a debut Eurobond sale in 2014, and may issue new debt “if an opportunity presents itself,” Rotich said in June. The potential for a U.S. rate increase and looming elections in Kenya have narrowed the window of opportunity if it wants to avoid higher borrowing costs, the International Monetary Fund Country Representative Armando Morales said last month.

“The Fed issue we have been hearing for a long time and some of these things are factored in,” Rotich said. “It’s only news if it can affect expectations, but it’s been there.”

Global investors are putting their money in emerging-market bonds in response to negative interest rates engineered by central banks globally, said Alan Cameron, an economist at Exotix Partners, making the next few weeks the optimal time to issue a bond.

“The investment universe for a lot of asset managers globally is shrinking, which is why they are being pushed into options like Kenya’s Eurobond,” he said by phone. “I don’t think the emerging-markets rally is going to end soon. And I think this trend will continue to December by the earliest.”

Yields on Kenya’s dollar bond due in June 2024 were steady at 7.15 percent by 11 a.m. in London.

Source: Bloomberg

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Kenya plans to borrow $4.6 billion to help plug a 9.3 percent budget deficit – Rotich
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