Namibia nails US$500m Eurobond payoff with domestic debt shift
On track
Namibia confident of securing US$500m to redeem two-thirds of Eurobond obligation, due in October.
The Bank of Namibia says the government is on track to raise US$500 million, which it plans to use to settle two-thirds of its US$750 million Eurobond obligation, due for redemption in October.
Its director for financial markets, Nicholas Mukasa, made the pronouncement during the monetary policy announcement this week.
“We have got a debt management strategy that we are following. We have got a sinking fund that we have put together, we have got some savings that will go towards redeeming this bond, and also as part of the borrowing plan we have picked up in the domestic issuances, part of that was to make way to raise the funding to redeem that bond, so as far as that sinking fund is concerned, it is performing well,” Mukasa said of efforts to settle the Eurobond.
The move is aimed at reducing Namibia's exposure to exchange rate risks while stabilising the debt-to-gross domestic product ratio.
The government, through the Ministry of Finance, had earlier said the remainder of the Eurobond obligation (US$250 million) will be converted to domestic debt, leveraging domestic liquidity and interest in government securities.
Domestic bonds
In terms of settling the remaining debt, the government plans to roll over all maturing domestic bonds in this fiscal year to create sufficient space to redeem the upcoming eurobond, the ministry said. “Furthermore, we plan to frontload the borrowing in the first half of the financial year, aligned to the domestic debt-repayment profile” for the year through March 2026, it said.
The strategy favours domestic over foreign borrowing as spreads on international markets have widened and Namibia’s credit rating has deteriorated since it issued eurobonds in 2011 and 2015, the ministry said.
Namibia issued those notes at coupons of 5.5% and 5.26%, respectively, though the government later hedged them at 6.94% and 7.52%.
The government accessed the Eurobond in 2015.
Bitly: //q.my.na/7X5G
Its director for financial markets, Nicholas Mukasa, made the pronouncement during the monetary policy announcement this week.
“We have got a debt management strategy that we are following. We have got a sinking fund that we have put together, we have got some savings that will go towards redeeming this bond, and also as part of the borrowing plan we have picked up in the domestic issuances, part of that was to make way to raise the funding to redeem that bond, so as far as that sinking fund is concerned, it is performing well,” Mukasa said of efforts to settle the Eurobond.
The move is aimed at reducing Namibia's exposure to exchange rate risks while stabilising the debt-to-gross domestic product ratio.
The government, through the Ministry of Finance, had earlier said the remainder of the Eurobond obligation (US$250 million) will be converted to domestic debt, leveraging domestic liquidity and interest in government securities.
Domestic bonds
In terms of settling the remaining debt, the government plans to roll over all maturing domestic bonds in this fiscal year to create sufficient space to redeem the upcoming eurobond, the ministry said. “Furthermore, we plan to frontload the borrowing in the first half of the financial year, aligned to the domestic debt-repayment profile” for the year through March 2026, it said.
The strategy favours domestic over foreign borrowing as spreads on international markets have widened and Namibia’s credit rating has deteriorated since it issued eurobonds in 2011 and 2015, the ministry said.
Namibia issued those notes at coupons of 5.5% and 5.26%, respectively, though the government later hedged them at 6.94% and 7.52%.
The government accessed the Eurobond in 2015.
Bitly: //q.my.na/7X5G
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