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Last week, Kenya made the interest payment of $68.7mn on schedule for its 6.875% 2024s, maturing in June. Subsequently the country abandoned its plan to buy back $300mn of the total $2bn outstanding principal for the bond. Ruto’s government initially had planned a buyback of as much as half of the debt, but government officials reduced the target to $500mn, and then subsequently to $300mn, sending mixed signals to investors. The government had planned to complete the buyback by December 31, and borrow from pan-African lender Trade and Development Bank to pay for the repurchase, as per central bank Governor Kamau Thugge. Moody’s had warned earlier that the buyback might constitute a default and could lead to a downgrade.
Kenya’s dollar bonds are trading stable, yielding over 9%.
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