The Central Bank of Kenya (CBK) has floated a six-and-a-half-year Infrastructure Bond worth KSh. 50 billion for funding of infrastructure projects in the 2023/24 budget estimates.
According to the CBK prospectus, the infrastructure bond has been on sale since 20th October 2023 and ends on 8th November 2023. Investors will be given a coupon rate that is market-determined.
The infrastructure bond, with a redemption rate of 6th May 2030, a 50% amortization outstanding principal amount, and 30% of the outstanding principal amount on 7th May 2029, will have a final redemption of all outstanding amounts on 6th May 2030.
The CBK will rediscount the bond as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher, upon confirmation from the NSE to do so.
Secondary trading of the bond in multiples of KSh 50,000 will commence on 13th November 2023 after the bond has been listed at the Nairobi Bourse.
Bids closure and auction date is 8th November 2023 while CBK will announce the results on 10th November 2023.
According to Kenya’s 2023/24 budget estimates, the Energy, Infrastructure, and ICT Sector remains the second largest expenditure center, after Education, accounting for 16.4% of total expenditure, primarily due to infrastructure resource requirements.
The Kenya Kwanza administration has allocated KSh 244.9 billion for the construction, rehabilitation, and maintenance of various road networks. Other big-ticket infrastructure projects include KSh37.4 billion for Standard Gauge Railway, KSh 2.6 billion Dongo Kundu Special Economic Zone, KSh 727 million for construction and expansion of airports and airstrips, KSh 579 million for Rehabilitation of Locomotives, KSh 500 million for the Smart Driving License, KSh 489 million for Development of Nairobi Railway City and KSh 300 million for acquisition of ferries for Lake Victoria.
At the Weekly Treasury Bills Auction, the CBK accepted bids worth KSh 27.4 billion, out of KSh 24 billion on offer, an oversubscription rate of 123.4%. The 91-day treasury bills were the most attractive instruments, recording an oversubscription of 588.90% with CBK accepting KSh 21.5 billion out of KSh 4 billion on offer.
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