BusinessHomeMain StoryNational NewsNews

CBK issues dual infrastructure bonds worth Ksh70 billion

Central Bank of Kenya (CBK) has issued two infrastructure bonds in a bid to raise Ksh70 billion. According to CBK, the two bonds, identified as IFB1/2022/14 and IFB1/2023/17, have maturities of 11.8 years and 15.1 years, respectively.

These two will also have a coupon rate of 13.398 per cent, and 14.399 per cent respectively. CBK has set the minimum investment for the bonds at Ksh50,000, with competitive bids starting at Ksh2 million per Central Securities Depository (CSD) account.

The non-competitive bids are capped at Ksh50 million per account. However, state corporations, public universities, and semi-autonomous government agencies are excluded from participating in non-competitive bids.

Auction is scheduled for Wednesday, February 12, 2025, and interested investors must submit their bids electronically via CBK’s platforms by 10:00 a.m. on the same day.

Successful bidders will be notified and required to make payments by February 14, 2025, and the bonds will be issued on February 17, 2025.

CBK warned that, “Pledges contracts that have not been cancelled five days before the Amortization date, will be cancelled automatically at CBK. Thereafter the pledged holdings will be transferred to the Lender and the amortized cash amount paid to the lender.”

One of the key advantages of these bonds is their tax-free status, which aligns with Kenya’s provisions for infrastructure bonds.

Additionally, the redemption structure for the bonds provides flexibility, with partial repayments starting in 2030 for IFB1/2022/14 and 2033 for IFB1/2023/17. Final redemption dates are set for October 2036 and February 2040, respectively.

CBK has also outlined provisions for liquidity and rediscounting. In cases of early liquidity needs, CBK will rediscount the bonds at 3 per cent above the prevailing market yield or coupon rate, further enhancing their attractiveness.

See also  Nyong’o, sister withdraw appeal in Sh200 million family property dispute

Investors can trade the bonds on the Nairobi Securities Exchange beginning February 17, 2025, with transactions available in multiples of Ksh50,000. The bonds are classified as non-benchmark and are open to investors with active CSD accounts.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
error: Content is protected !!