The CBK has floated two fixed coupon Treasury Bonds in the month of August, as it seeks KSh 40 billion for budgetary support. Investors are required to obtain details of amounts payable for successful bids from the DhowCSD, a new mobile App run by the CBK, on Thursday, 17th August 2023. The results will contain a unique transaction reference for payment.
CBK offer to successful bidders
The two-year Treasury Bonds will have a market determined coupon rate while the 5-year Treasury Bonds will have a fixed coupon rate of 16.8%. The tap sale of these two treasury bonds begun on 31st July and will run until the auction date of 16th August 2023 with a value date of 21st August 2023 for successful bidders.
Treasury bonds bids must be submitted to the Central Bank electronically via CBK DhowCSD or Treasury Mobile Direct (TMD) by 10.00am on Wednesday, 16th August 2023. Licensed placing agents will be paid commission at the rate of 0.15% of actual sales, net of 5% withholding tax.
The CBK will rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate whichever is higher, upon written confirmation to do so from the Nairobi Securities Exchange(NSE).
Investors can redeem the 2-year t-bonds on 18th August 2025 while the 5-year t-bonds have a redemption date of 10th July 2028. The bonds will be listed on the Nairobi Securities Exchange. These bonds are benchmark Bonds and only investors with active CSD Accounts with the CBK.
The Bonds may be re-opened at a future date. Secondary trading in multiples of 50,000.00 will commence on Tuesday, 22nd August 2023.
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