Treasury raises Ksh.81.9 billion from April’s infrastructure bond


Treasury raises Ksh.81.9 billion from April’s infrastructure bond

In Summary

  • The sum raised from the local borrowing instrument sits above the exchequer’s target of Ksh.60 billion- an indicator of high investor appetites for the issue which is exempt from tax.
  • Total investor bids for the issues stood at Ksh.88.6 billion representing a 147.6 per cent performance rate for the bond.
  • Proceeds from the bond will be deployed to infrastructure specific projects including the payment of suppliers.

The National Treasury has raised Ksh.81.9 billion in proceeds from its second infrastructure bond this year, issued this month.

The sum raised from the local borrowing instrument sits above the exchequer’s target of Ksh.60 billion- an indicator of high investor appetites for the issue which is exempt from tax.

Total investor bids for the issues stood at Ksh.88.6 billion representing a 147.6 per cent performance rate for the bond.

Proceeds from the bond will be deployed to infrastructure specific projects including the payment of suppliers.

Investors in the 18-year tenured paper will meanwhile receive pay outs pegged at interest rates of 12.67 per cent with the Central Bank of Kenya (CBK) having cut out aggressive bidders from the issue.

January’s infrastructure bond yielded Ksh.81.1 billion in proceeds to the exchequer beating a lower Ksh.50 billion target as the government continued to find easy pickings from the issuance of the tax-free instrument.

The heavy investor appetites have however been subdued in regular bond issues as investors chase for higher yields while cutting off risks emanating from the longevity of issues.

Investors have nevertheless favored holdings in government securities as a response to volatility emanating from the COVID-19 shocks last year.

The re-emerging interest has similarly propped the performance of the secondary bond market which falls under the scope of the Nairobi Securities Exchange (NSE).

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Story By Kepha Muiruri
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