The Central Bank of Kenya (CBK) has invited bids for re-opened 15-year Treasury Bonds and new 25- year Treasury Bonds, all worth a total of KSh 30 Billion. The purpose of the sale, which begun on 23rd April and ends on 4th May 2021, is to raise funds to support budgetary spending.
CBK Prospectus
According to a prospectus issued by the CBK, the 15 year Treasury Bonds will attract a coupon rate of 12.734% per annum, while investors will be paid a determined market rate for the 25-year Treasury Bonds.
Interested bidders must submit duly completed bond application forms to any CBK branch by 2 pm on 4th May 2021 using all available channels, including mobile or internet banking platforms.
The Auction Date is Wednesday, 05/05/2021, with investors to obtain details of amounts payable for successful bids from the Central Bank of Kenya on 06/05/2021.
Central Bank of Kenya will rediscount the bonds at 3% above the prevailing market yield or coupon rate, whichever is higher. This is upon written confirmation from the NSE.
These bonds will be listed on the NSE, with only those with active CDS accounts allowed to participate.
In multiples of KSh 50,000.00, secondary trading of the bonds will commence on Tuesday, 11th May 2021 and may be reopened at a future date.
All licensed placing agents will get a 0.15% of actual sales, at cost, net of 5% withholding tax.
The CBK will pay a discount/Interest, subject to withholding tax at a rate of 10% for the two Bonds.
The redemption date for the 15 year Treasury Bonds is 24th April 2034, while that for the 25-year Treasury Bond is 9th April 2046.
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