The Treasury is considering negotiating with a group of international banks to delay repayment of its
The government had indicated that it would spend part of the proceeds from the upcoming Eurobond issue to repay the syndicated loan, which is due having been borrowed in 2012.
"It is envisaged that the syndicated loan will be repaid with proceeds of the Eurobond. However, the government is exploring the possibility of rolling over the syndicated loan three years," says
The MTDS guides the government on the best borrowing strategy by comparing cost and risk characteristics of existing public debt and alternatives.
The government is planning to raise as much as
The balance after paying the syndicated loan is to be used to plug the Sh330 billion deficit and finance infrastructure projects.
The loan was underwritten and arranged by
Extending the loan's repayment period is expected to increase interest payments and put some pressure on government's resources due to increased rates in the market.
The loan was priced at 4.75 percentage points above the
Analysts also said that rollover could indicate a possible delay in issue of the sovereign bond, though the Treasury did not indicate this.
Other analysts said the government could be seeking to use the Eurobond cash for more urgent needs.
"It could be that they want to direct the funds they would have paid off the debt to other capital projects," said
Rolling over the debt and adding more debt will see the country take a step towards the limit set by Parliament.
Most Popular Stories
- Major Phone Makers Sign Anti-Phone-Theft Pledge
- 'Beige Book' Federal Reserve Survey, April 2014: Full Text
- Chevrolet's Small SUV Coming to the U.S.
- Yahoo Struggles Despite Alibaba Boost
- Brands Get Caught in Bitter-Tweet Traps
- Rapper Cuts Off Own Penis, Jumps Off Building in Failed Suicide
- Is This Job Too Good to Be True?
- Neil Young Closes Kickstarter Campaign for PonoMusic
- Yellen Remarks, Market Data Give Stocks a Boost
- Castro Named as a Caress Fabulista