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EM CEEMEA CREDIT: KENINT: Spreads tighter YTD

EM CEEMEA CREDIT
Bullet

Kenya (KENINT: Caa1pos/B-/B-)

  • Kenya’s sovereign USD curve has tightened marginally in z-spread terms YTD, with the benchmark KENINT 6.3% Jan34 charting @ z+568bp (-13bp). Kenya has around USD300mn per year amortising between 2025-27 and USD1bn in 2028.
  • We see Kenya’s refinancing needs are around USD2bn and expect the country could use a combination of bilateral lending and bond market issuance to refinance.
  • Kenya is speaking with the IMF for a new lending programme ahead of the current one expiring in April (see link below). Reuters reported last week that Kenya has an option of a USD1.5bn 8.25% facility available from UAE but are considering alternative sources including a Eurobond.

  • Moody’s rating is one notch lower compared to S&P and Fitch, but the agency put Kenya on positive outlook, citing declining borrowing costs, lower inflation (within central bank target of 2.5-7.5% since mid-23) and stable FX.

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Kenya (KENINT: Caa1pos/B-/B-)

  • Kenya’s sovereign USD curve has tightened marginally in z-spread terms YTD, with the benchmark KENINT 6.3% Jan34 charting @ z+568bp (-13bp). Kenya has around USD300mn per year amortising between 2025-27 and USD1bn in 2028.
  • We see Kenya’s refinancing needs are around USD2bn and expect the country could use a combination of bilateral lending and bond market issuance to refinance.
  • Kenya is speaking with the IMF for a new lending programme ahead of the current one expiring in April (see link below). Reuters reported last week that Kenya has an option of a USD1.5bn 8.25% facility available from UAE but are considering alternative sources including a Eurobond.

  • Moody’s rating is one notch lower compared to S&P and Fitch, but the agency put Kenya on positive outlook, citing declining borrowing costs, lower inflation (within central bank target of 2.5-7.5% since mid-23) and stable FX.

Keep reading...Show less