Treasury scoops Ksh.107 billion from September infrastructure bond

The National Treasury met its local borrowing target through bonds for the umpteenth time after its September infrastructure bond (IFB) issue received Ksh.151.3 billion investor bids.

This against an initial target of raising Ksh.75 billion translating to more than twice the figure sort by the exchequer ministry.

The entire sum of Ksh.106.8 billion raised from the issue is expected to care for infrastructural needs by government.

The heavy subscription for the IFB was however widely expected with the paper’s attraction being its tax free status.

On a broader scale, investors have maintained their attraction to government paper in a flight from risk following the emergence of COVID-19 as a pandemic in March last year.

The increased appetites have for instance led to an uptick in turnovers for the secondary bonds market on the Nairobi Securities Exchange (NSE), a section comprising largely of issued government paper.

The mopping up of Ksh.106.8 billion has been tipped to ease pressure on the shilling by drying up part of the liquidity seen in the financial system.

The expectation comes even as the local unit continues to trade above the Ksh.110 mark against the US dollar.

It is unclear whether the Central Bank of Kenya (CBK) will invoke a tap sale to mop Ksh.44.5 billion left on the table during the opening issue of the latest IFB.