Rated sub-investment grade at B1 with a stable outlook by Moody's last November, the east African nation is searching for a lead manager and lead counsel for its debut Eurobond issue, expected later this year.
A senior Kenyan official said this week that Kenya still planned to go ahead with the Eurobond despite rising borrowing costs in the international markets.
"The authorities have continued to improve debt management," the IMF said in the report co-authored by the World Bank, citing the elevation of the debt management office, to an agency level within Treasury, last July.
Kenya's debt to gross domestic product ratio fell to 43 percent at the end of 2012 from 48 percent at the end of 2011, the IMF said, crediting prudent fiscal policy and a stable macroeconomic environment.
Public debt is evenly split between local and external creditors, with the bulk of its external liabilities held under concessional terms by institutions like the World Bank.
"Standard stress tests do not reveal any significant vulnerability as even the shocks with the highest impact would maintain debt levels below the relevant indicative thresholds," the IMF said.
"The biggest risks to external debt sustainability come from exchange rate shocks and less favourable terms on new public sector loans," it added.
Slower than expected growth, triggered by drought, a surge in the prices of food and oil, or an economic deterioration in key trading partners like Europe, could also pose a risk to debt sustainability, the IMF said.