When going to the debt markets, officials should dress well, but they should not try to dress up their economies in a misleading way, Kenya’s central bank governor said.
The country plans to raise as much as $2.5 billion in its third Eurobond issuance.
“There is no such thing as window dressing, and you should not hope that window dressing will help you; you should actually do what you need to do, make sure you have a solid argument, a solid foundation and wear a suit, and then you will get a good rate,” Patrick Njoroge told reporters Tuesday in the capital, Nairobi.
Kenya is planning on issuing the bond in the first quarter as it seeks to retire $750 million of debt maturing in June and raise funds for development projects. Reorganizing the loans will allow East Africa’s biggest economy to lower the carrying costs of existing loans and lengthen their maturity profile. Kenya’s debt rose to an all-time high of 5.15 trillion shillings ($51 billion) by September, representing 56.5 percent of gross domestic product, the bank said.
“If I go and borrow, I need to tell the bank what my plans are for this money, what’s the project, the likelihood for success, what risk-mitigation measures I have in place, all those things,”Njoroge said. “That is how you get a lower rate. It is not about anything else, it is about how you present yourself.”