Central Bank Floats KSh 50 Billion Infrastructure Bond

Kenya's Forex Reserves falls in September

The Central Bank of Kenya (CBK) is inviting bids for its Ksh 50 billion Infrastructure Bond (IFB) with a tenor of 16 years (IFB1/2021/16) to fund infrastructure projects in the current fiscal year.

This is the second bond with the 2020/21 fiscal year after the re-opening and tap sales of FXD1/2012/15 and FXD2/2019/15 in December 2020. 

Investors are required to submit their bids for the bond at a minimum of KSh 100,000, whose sale closes on 19th January 2021.

The Bond has a value date of 25th January 2021.  Bids for the 16-year infrastructure bond close by 2 pm on Tuesday 19th January 2021.

Investors will receive the first Interest payment on this infrastructure bond on 26th July 2021 and every six months till 5th January 2037 as the final redemption of all outstanding amounts.

This Bond will be Tax-free as is the case for Infrastructure Bonds as provided for under the Income Tax act.

The infrastructure bond will be listed on the Nairobi Securities Exchange and may be re-opened at a future date.

Secondary trading in multiples of KSh 50,000.00 will commence on 26th January 2021 for this infrastructure bond.

“We expect investors to bid aggressively for the bond with the CBK likely to accept more than its borrowing target due to high financing needs brought
about by a shortfall in revenue collection targets for short-amortized the current fiscal year,” Sterling Research says in its Fixed Income Report – January 2021 – “2021 get set, go!”