Treasury eyes Sh50 billion in new bond

Central Bank of Kenya. FILE PHOTO | NMG

By CHARLES MWANIKI
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Summary

• The Treasury has opened the sale of a new bond seeking Sh50 billion, coming hot on the heels of the heavily oversubscribed infrastructure bond that raised Sh81 billion.
• The Central bank of Kenya, acting as the government’s fiscal agent, said that the new dual tranche bond is a reopening of a 20-year paper first sold in 2012, and a 15-year paper whose initial sale was in 2013.
• This means that the effective tenor of the two papers is 11.8 and 7.1 years respectively. 

The Treasury has opened the sale of a new bond seeking Sh50 billion, coming hot on the heels of the heavily oversubscribed infrastructure bond that raised Sh81 billion.

The Central bank of Kenya, acting as the government’s fiscal agent, said that the new dual tranche bond is a reopening of a 20-year paper first sold in 2012, and a 15-year paper whose initial sale was in 2013.

This means that the effective tenor of the two papers is 11.8 and 7.1 years respectively. The bond will be on sale until February 2.

The 2012 paper carries a coupon of 12 percent, while the 2013 bond has a coupon of 11.25 percent.

Last week, the Treasury closed the sale of the 16-year infrastructure bond, which realised total bids worth a Sh125.47 billion—CBK took up Sh81.05 billion— in a liquid market.

It is this excess liquidity that the Treasury is hoping to tap in the new issuance.