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Kenya received approval for a $1bn loan from the World Bank amid concerns about its external debt repayment ability. Kenya has a dollar bond maturity payment of $2bn due in 2024 with forex reserves declining steadily to $6.3bn. The nation has been delaying payment of civil wages amid financing constraints. The World Bank’s support adds to IMF’s verbal support for the sovereign earlier this month. Kenya’s budget has seen pressure due to revenue shortfalls and other challenging financing conditions. The loan would fall under the World Bank’s Development Policy Financing program and this is the fifth time that Kenya is tapping the facility. Kenya’s total borrowing under this program now stands at $4.25bn.
Kenya’s dollar bonds have been trending higher over the course of this month and were higher by 0.5 points on Tuesday. Its 7.25% 2028s are up 9% this month and currently trade at 83.92, yielding 11.8%.
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