The Central Bank of Kenya (CBK) has raised KES 179.8 billion from the tap sale of two reopened infrastructure bonds auctioned last week. The sale, which advertised KES 50 billion, with coupon rates of 12.5% and 12.96% for the 15-year and 19-year papers, was highly oversubscribed. The auction received bids totaling KES 207.5 billion, out of which the CBK accepted KES 179.8 billion with average yield settling at 12.99% for the 15-year paper and 13.99% for the 19-year paper. The Central Bank was forced to close the sale earlier after meeting its target.
CBK Raises KES 95B Amid Surging Bids
The primary auction last week, which targeted KES 90 billion, had a performance rate of 359.37%, with total bids amounting to KES 323.4 billion, reflecting strong investor confidence. The Central Bank accepted KES 95 billion, which was used to settle a KES 94.68 billion maturity paper issued in August 2023 at a coupon rate of 16.97% – one of the most expensive bonds.
The treasury is also expected to pay KES 15.2 billion on 15th September, 29.7 billion on 1st December and 19.9 billion on 8th December for government papers floated in 2013, 2022, and 2010, respectively. Externally, the treasury is expected to pay principal and interest amounting to KES 41.6 billion to the Eastern and South African Trade and Development Bank and a Semi annual interest of KES 19.47 billion on Eurobonds.
Infrastructure bonds have attracted both individual and corporate investors mainly because of their exemption from withholding tax.
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