Kenya’s Eurobonds Slide as President Ruto Pushes for Debt Restructuring

Kenya’s Eurobonds witnessed a decline in value following President William Ruto’s appeal for a debt restructuring initiative by developed nations.

This development was reported by Bloomberg.

President Ruto made the call during his address at the UN General Assembly in New York. He advocated for a new approach to sovereign debt, one that doesn’t necessitate nations “to plunge over the cliff into debt distress before providing relief.” Instead, he proposed a sovereign debt framework that extends the maturity of sovereign debt and offers a 10-year grace period for countries facing debt distress.

While President Ruto did not explicitly mention Kenya in his speech, investors expressed concerns about his remarks on debt restructuring, as highlighted by Bloomberg.

As a result of these concerns, yields on Kenya’s dollar bonds due in 2032 surged by 41 basis points, reaching 12.36%. This marked the highest level in four months on a closing basis.

Additionally, the spread between the yields on Kenya’s Eurobonds and US Treasuries widened by 47 basis points to 810, according to JPMorgan Chase & Co. indexes, as reported by the news agency.