Kenya Govt 15 Year Infrastructure Bond Oversubscribed

The Kenyan Government has successfully raised Ksh 30.57 Billion after its first 15 Year infrastructure bond was subscribed by 116.96%. The Government said the money raised would be used to largely to finance energy, water and road projects.

The Central Bank of Kenya announced that it had received 1268 applications amounting to Ksh 35 Billion but accepted 1194 bids amounting to Ksh 30.5 Billion against a target of Ksh 30 Billion.

Demand for Government paper seems to be very strong at the moment as the bond was sold at a decent rate of 13.17%, and with an oversubscription, this was a clear indication that banks would rather lend to the government rather than lend to the risky citizen at a rate of 14%.

“The bond will be tax free as in the case for all infrastructure bonds as provided for under the Income Tax Act” Read the prospectus for the bond which was issued a week ago..

CBK also noted that the bond will be listed at the Nairobi Securities Exchange would also be re-opened at a future date.

Treasury Bills Undersubscribed

Meanwhile on the weekly auction market, Treasury Bills were undersubscribed for the first time in many weeks as the 91-day treasury bill yield fell to 7.696% versus last week’s 7.719%, CBK sold bonds worth Ksh 1.359 billion against a target of Ksh 4 billion.

The 182-day treasury bill yield fell to 10.281% vs last week’s 10.292% as the Central Bank sold bonds worth Ksh 8.104 billion against a target of Ksh 6 billion. The 364-day t-bill yield rose marginally to 10.411% compared to 10.329% posted last week, CBK sold Ksh 4.736 billion of the 364-day t-bills against a target of Ksh 6 billion.