Treasury seeks Ksh.60 billion from Aprils infrastructure bond

The National Treasury has set its sights on tapping Ksh.60 billion from this year’s second infrastructure bond (IFB) issue whose sale closes in early April.

The 18-year tenured paper is on sale to local investors until April 6 from whose proceeds will be used to fund outstanding infrastructure projects slated for June year.

The bond whose yields will be market determined is expected to attract sizable investor interest given its tax-free status.

The exchequer will be hoping to use the issue to re-align its domestic borrowing program which suffered from low uptake patterns in March.

For instance, bond proceeds this month stood at Ksh.48.3 billion or an equivalent 3.5 per cent shy of the exchequer’s Ksh.50 billion target.

According to data from the first 2020/2021 supplementary budget, Treasury is set to raise its net domestic borrowing target by Ksh.46 billion to accommodate additional expenditures introduced in the mini-budget program.

The final 2021 Budget Policy Statement (BPS) estimates total net domestic borrowing to June at Ksh.540.1 billion.

Further, net domestic borrowing in the new financial year commencing on July 1 is tabulated at a higher Ksh.662.8 billion.

Kenya’s stock of domestic debt was meanwhile estimated at Ksh.3.7 trillion by the end of the current financial year or an equivalent 48.1 per cent of total debt, estimated at Ksh.7.7 trillion at the end of June 2021.