Citi goes "underweight" Kenya international bonds, sees more ratings downgrades
11/07/2024 08:32
LONDON, July 11 (Reuters) - Citi moved its exposure to
Kenya's international bonds to "underweight", saying it expected
fiscal concerns to persist and saw a "significant" risk of more
credit rating downgrades after Moody's slashed the country's
rating on Monday.
"The Moody’s rating downgrade has crystallized rising market
concerns about Kenya’s fiscal consolidation path based on an
ambitious revenue mobilization program outlined by the IMF,"
said Citi's Nikola Apostolov in a note to clients dated
Wednesday.
Fellow ratings agencies S&P and Fitch both had Kenya on a
negative outlook, Apostolov added.
"Both rating agencies highlight the risk of fiscal slippage
and rising borrowing costs as key potential triggers to a
downside scenario," Citi's note said.
Following deadly protests, President William Ruto withdrew a
finance bill in late June which contained tax increases central
to policy reforms agreed by Kenya with the International
Monetary Fund as part of a lending programme worth $3.6 billion.
(Reporting by Karin Strohecker; editing by Dhara Ranasinghe)
((karin.strohecker@thomsonreuters.com; +442075427262; Reuters
Messaging: karin.strohecker.reuters.com@reuters.net))