Several counties are considering raising funds through the capital markets to drive development according to the latest Capital Markets Authority’s research paper. These counties include Kiambu, Kericho, Mombasa, Bomet, Kisii, Kisumu, Meru, Kilifi, Mombasa, Uasin Gishu, Migori, Nakuru, Laikipia, Isiolo, Kakamega, and Bungoma.
County Bonds
The various county governments will use the funds to finance the development projects of their choice such as infrastructure. To do this, county governments will issue county bonds, a new capital markets product that is currently in the pipeline.
CMA’s New Listings Paper of 2005 recommended the continued process of identifying, researching, and developing new products. “The introduction of more financial products would enable investors diversify risks and issuers would design instruments appropriate to the nature of their businesses.”
Some of these financial products include “convertible corporate bonds, index funds for listed equity and bond funds, tradable depository receipts, special social bonds, mortgage securitisation, municipal bonds, futures and derivatives, Real Estate Investment Trusts swaps and options.”
Currently, the research on municipal/county bonds and their potential issuance is “under review through the funding gap consultancy project spearheaded by Working Group 1 of the Capital Markets Master Plan.”
