CBK Floats 14-Yr Infrastructure Bond Worth KSh 60 Bn

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A section of The Nairobi Expressway during its construction.

The Central Bank of Kenya is offering a 14-year infrastructure bond (IFB1/2022/14), seeking to raise Kshs 60.0 billion to fund infrastructure projects in the current fiscal year.

“The Bond will be tax-free as is the case for infrastructure Bonds as provided for under the Income Tax Act,” CBK said in the prospectus.

The coupon rate will be market determined.

The sale period is between 26 October 2022 to 8th November 2022, and the payment date is 14th November 2022.

Bidders are to invest a minimum of KSh 100,000. Redemption will be in two tranches, with the first tranche of 50% redeemed in November 2030 and the remaining 50% at expiry in October 2036.

Rates in the Fixed Income market have remained relatively stable due to the relatively ample liquidity in the money market.

“In the weeks to the end of 2022, demand for government securities will likely remain volatile and reflective of liquidity conditions.

Certainly, less pronounced government inflows in lieu of payments has greatly distorted interbank cash conditions,” the NCBA Research team states.

The government is 8.7% behind its prorated borrowing target of Kshs 180.6 billion, having borrowed Kshs 164.9 billion of the Kshs 581.7 billion borrowing targets for the FY’2022/2023.

Lower Demand Expected in Kenya Government Securities Auction

 

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