Treasury seeks Ksh.30B in May bonds

The National Treasury is seeking to raise Ksh.30 billion in new local borrowing through the issuance of bonds in the month of May.

The Central Bank of Kenya (CBK) which represents the exchequer’s primary debt auctioneer has listed two bonds — a re-opened 15-year issue and a new 25-year bond.

The 15-year bond with an estimated 13 years to maturity is priced in at 12.734 per cent (coupon rate) while the new bond will have a market determined rate.

The sale of the two bonds which opened on Friday this week is expected to close on May 4.

Investors are likely to go for the shorter timed paper as trends on previous issues as they remain risk averse by avoiding lengthy bonds.

This month, Treasury raised Ksh.81.9 billion from the issuance of an infrastructure bond, it’s second this calendar year.

This from an initial target of Ksh.60 billion as investors packed offers for the tax-free issue with total bids received for the 18-year paper totaling to Ksh.88.6 billion or a representative 147.6 per cent performance rate.

Investor appetites for the new issues are expected to be subdued with the infrastructure bond issued this month being the more attractive offer.

At the same time, investors in the new bond are likely to push for higher yields but the CBK is expected to maintain its stance on cutting off aggressive bids.