Central Bank of Kenya(CBK) received bids amounting to KSh 76.4Billion from the 18-year Infrastructure Bond issued in May 2022, a performance rate of 101.83%, with the state fiscal agent accepting KSh 73.8 Billion.
This infrastructure bond was worth KSh 75 Billion. Of the amounts accepted, KSh 63.3 Billion was made up of competitive bids, while non-competitive bids were worth KSh 10.5 Billion.
CBK offer to successful bidders
The Infrastructure bond, whose due date is 21st May 2040, will have a coupon rate of 13.742%, with KSh 35.3 Billion used for loan redemptions while KSh 38.5 Billion will be used for new borrowings/net loan repayments.
The forthcoming treasury bond(s)issues for July, including tenor, amounts, coupon rates and issue terms, will be, according to the CBK, provided in the prospectus before the due date.
The Government intends to use proceeds from this auction for funding infrastructure projects in the 2021/22 budget estimates.
According to the CBK prospectus, the period of sale for this infrastructure bond was from 23rd May 2022 to 7th June 2022.
The value and payment date is 13th June 2022, with investors required to place bids at a minimum of KSh 100,000.00.
This bond will be fully redeemed on 21st May 2040, with the first interest payment scheduled for 12th December 2023.
CBK required bidders to submit their bids by 2.00 p.m. on Tuesday, 7th June 2022, while the Auction Date was Wednesday, 8th June 2022.
Investors obtained details of amounts payable for successful bids from the Central Bank of Kenya on Thursday, 9th June 2022.
The CBK will rediscount the bond as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher, upon written confirmation from the Nairobi Securities Exchange(NSE).
The list of infrastructure projects to be implemented in the 2021/22 financial year includes phase II of the Standard Gauge Railway expected to cost KSh 27.2 billion and KSh 7.5 billion for the LAPSSET Project, KSh 50.1 billion to cater for transmission and distribution of power; KSh11.3 billion for development of geothermal energy; KSh 6.4 billion for the electrification of public facilities and KSh 1.3 billion for developing nuclear energy.