The Central Bank of Kenya (CBK) has reopened the March infrastructure bond looking to raise KES 20 billion.
The sale will continue until Friday or until the desired amount is reached on a first-come-first-served basis through applications submitted to the government’s fiscal agent.
CBK intends to take advantage of the bond’s appeal to raise the required funds, as the primary sale of the bond was heavily oversubscribed, with bids amounting to KES 59.77 billion against a target of KES 50 billion from investors.
With a tax-free interest rate of 14.39 per cent, the initial sale of the security by CBK amounted to KES 50.88 billion, making it the highest-yielding paper outstanding.
Furthermore, the interest that has already accrued on the security will be factored in through a small premium adjustment to the principal amount paid by investors. For instance, investors seeking KES 500,000 bond face value will have to pay KES 501,340.
The willingness of the CBK to accept more expensive bids has been driven by the higher returns offered by Treasury instruments, which reflects pressure on the government to raise revenue.
Additionally, heavy domestic maturities have added pressure on the government to accept higher yields in bond issuances.
If you would like to invest in tap sale of the March infrastructure bond reach out to Hisa via email at [email protected]
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