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Uganda to debut 25-year bond as it seeks to extend maturity of its debt - REUTERS
KAMPALA, July 28 (Reuters) – Uganda’s government will sell a 25-year bond for the first time next week, its longest-dated debt instrument yet, as it seeks to extend the maturity of its debt portfolio and limit cash flow pressures, a senior central bank official said on Monday.
Currently the lengthiest government bond on sale has a maturity of 20 years.
“Borrowing long-term has an advantage that the cash pressure is reduced but also the costs tend to be lower compared to the short-term,” Jimmy Apaa, director for financial markets at the East African country’s central bank, told Reuters.
“When government borrows short-term then it will experience cash flow pressure,” Apaa said, adding that the first sale of the 25-year bond would be on August 6.
Uganda is following in the footsteps of neighbouring Kenya, which has also sought to lengthen the maturity of its debt to manage financing pressures.
(Reporting by Elias Biryabarema; Editing by Alexander Winning and Ros Russell)
