Kenya’s central bank accepted Ksh 16.3 billion of the 25-year amortised bond (IFB1/2019/25) on offer at an auction on Wednesday attributed to its unattractive and duration risk associated with long-term papers.
The Central Bank of Kenya (CBK) had offered Ksh 50 billion of the fixed-rate Treasury bonds with a 12.2% coupon with proceeds expected to partially fund infrastructure projects in transport, water, and energy sectors.
It received bids worth, Ksh 29.37 billion, but accepted Ksh 16.30 billion of bonds, ‘ indicating that bids were largely not within ranges the Central Bank of Kenya (CBK) deemed acceptable,” said Cytonn Investments. The overall subscription rate was 58.8%.
It said the weighted average yield to maturity in the auction was 12.65%.
The redemption date is February 2044, but half of the outstanding principal amount will be paid out in March 2034.
The results of the Treasury Bond auction. pic.twitter.com/5lACaG9HGT
— Central Bank of Kenya (@CBKKenya) March 21, 2019
Financial Analysts -Genghis Capital, Commercial Bank of Africa Limited analysts Faith Atiti and Stephanie Kimani and Cytonn Investments had said the bond was unattractive to long term buyers.