The Central Bank of Kenya (CBK) has announced a KSh 50 billion tap sale of two infrastructure bonds after last week’s record oversubscription showed strong investor appetite for tax-free government securities.
- •The sale, running from 19 to 21 August 2025, will reopen the fifteen-year IFB1/2018/015 and nineteen-year IFB1/2022/019, which had attracted bids worth KSh 323.4 billion against an initial KSh 90 billion offer.
- •CBK only accepted KSh 95 billion, highlighting the scale of unmet demand.
- •The tap sale will be allotted on a first-come, first-served basis, with settlement set for 25 August 2025.
Pricing is based on the weighted average accepted yields from the August 18 auction, adjusted for accrued interest. Investors will secure the same tax-free benefits as the initial issues.
| Bond Issue | Tenor | Maturity Date | Yield (%) | Adjusted Price (KSh 100) | Coupon (%) |
|---|---|---|---|---|---|
| IFB1/2018/015 | 15yr | Jan 2033 | 12.9934 | 99.3937 | 12.5000 |
| IFB1/2022/019 | 19yr | Jan 2041 | 13.9991 | 94.8458 | 12.9650 |
Investor Momentum
The record performance rate of 359% in last week’s sale reflected unprecedented demand for long-dated, tax-free bonds. Analysts link the rush to their tax-exempt status, higher coupons compared with shorter papers, and renewed retail investor participation. Non-competitive bids alone amounted to over KSh 64 billion, underlining the broad-based interest.
By moving quickly with an infrastructure bond tap sale, CBK is capitalizing on this momentum to raise additional funds while maintaining market confidence. The issuance also strengthens the government’s infrastructure financing strategy without increasing tax burdens on investors.
The outcome of this tap sale will be closely watched to gauge whether demand sustains at the same intensity, especially given the first-come, first-served allotment structure. The rest of the funds not absorbed in the reopened auction and tap sale could now filter into the NSE secondary market, adding depth to trading of the same infrastructure bonds.
