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Treasury Bills and Bonds
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heri
#1701 Posted : Monday, January 29, 2024 9:15:31 AM
Rank: Member

Joined: 9/14/2011
Posts: 869
Location: nairobi
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it
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kediveKed
#1702 Posted : Tuesday, January 30, 2024 10:28:07 AM
Rank: New-farer

Joined: 3/28/2016
Posts: 37
Location: nairobi
heri wrote:
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it

This even after Ivor Coast's Eurobond was over subscribed? What your view on this and Kenya's likelihoods to refinance?
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heri
#1703 Posted : Tuesday, January 30, 2024 10:31:52 AM
Rank: Member

Joined: 9/14/2011
Posts: 869
Location: nairobi
kediveKed wrote:
heri wrote:
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it

This even after Ivor Coast's Eurobond was over subscribed? What your view on this and Kenya's likelihoods to refinance?


I hear that IMF has given Kenya some conditions on debt sustainability to be met in the next 3 years and one of them is Debt/GDP ratio . So I hear that refinance would be a problem because of where our ratio is
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winmak
#1704 Posted : Tuesday, January 30, 2024 5:21:57 PM
Rank: Member

Joined: 12/1/2007
Posts: 539
Location: Nakuru
heri wrote:
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it


How so? Default manenoz? What is the likelihood of this happening?
For investors as a whole, returns decrease as motion increases ~ WB
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VituVingiSana
#1705 Posted : Thursday, February 08, 2024 8:33:55 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,346
Location: Nairobi
winmak wrote:
heri wrote:
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it


How so? Default manenoz? What is the likelihood of this happening?

NEVER SAY NEVER! Look at Ghana.

That said... it is highly unlikely, but not impossible, for a country to default on its debt in its currency.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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MatataMingi
#1706 Posted : Sunday, February 11, 2024 4:38:16 PM
Rank: Member

Joined: 11/17/2009
Posts: 399
Location: Where everyone knows you
i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these.
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Monk
#1707 Posted : Monday, February 12, 2024 6:52:48 AM
Rank: Member

Joined: 7/1/2009
Posts: 272
MatataMingi wrote:
i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these.


I'm not a finance expert, but in my view, the gov has already technically defaulted at least twice in the recent past. I recall local lenders to KQ being forced into a debt for equity swap in 2017. Technically, as guarantor, they defaulted. More recently, instead of refunding OMCs subsidies, they convinced them to swap debt for bonds. Some of that debt (for those who held out) is still outstanding.

When US Export-Import bank issued Kenya with a default notice last year(guaranteed KQ loan again), they couldn't pull the move they had previously done with local banks.

Clearly, there is precedent of local debt restructuring.
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  | | Edit by user: Monday, February 12, 2024 6:56 AM | Reason: Not specified
kediveKed
#1708 Posted : Tuesday, February 13, 2024 10:28:12 AM
Rank: New-farer

Joined: 3/28/2016
Posts: 37
Location: nairobi
Monk wrote:
MatataMingi wrote:
i think that it is impossible for Kenya to default on payments on T Bills & Bonds that are in local KES.
If they did that, most Banks, Pension Funds, Mutual Funds etc.in Kenya would collapse.
Just check their Balance Sheets, to see how much they have invested in these.


I'm not a finance expert, but in my view, the gov has already technically defaulted at least twice in the recent past. I recall local lenders to KQ being forced into a debt for equity swap in 2017. Technically, as guarantor, they defaulted. More recently, instead of refunding OMCs subsidies, they convinced them to swap debt for bonds. Some of that debt (for those who held out) is still outstanding.

When US Export-Import bank issued Kenya with a default notice last year(guaranteed KQ loan again), they couldn't pull the move they had previously done with local banks.

Clearly, there is precedent of local debt restructuring.


Good point but if the government restructures local debt such as a bonds, doesnt that amount to an arrangment with creditors which would also amount to an event of default under Eurobonds. My thinking is based on the assumption that Eurobonds have cross default obligations. The examples you have given above must have been implemented in a manner that does not trigger the cross default provisions in Eurobonds. I could be wrong though. However, i do think in most part that eurobond holders and local bond holders are in some form of "lockstep".
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winmak
#1709 Posted : Wednesday, February 14, 2024 9:43:03 PM
Rank: Member

Joined: 12/1/2007
Posts: 539
Location: Nakuru
coupon rate 18.42%... non competitives fully allocated!!!
For investors as a whole, returns decrease as motion increases ~ WB
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obiero
#1710 Posted : Thursday, February 15, 2024 7:26:37 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,211
Location: nairobi
VituVingiSana wrote:
winmak wrote:
heri wrote:
winmak wrote:
what's the market sentiment on the Feb IFB/2024/8.5 ? There's been talk on massive exit from bonds by institutions. Even taking haircuts

For me the future is very uncertain and very worrying. I am only putting in something small knowing that I could lose a big part of it


How so? Default manenoz? What is the likelihood of this happening?

NEVER SAY NEVER! Look at Ghana.

That said... it is highly unlikely, but not impossible, for a country to default on its debt in its currency.

Remember Greece.. That country was almost closed down

KQ ABP 4.26
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