Central Bank of Kenya floats US456m infrastructure bond

Image: KenyanWallstreet

KENYA – The Central Bank of Kenya (CBK) is inviting bids for its US$456 million Infrastructure Bond (IFB) with a tenor of 16 years to fund infrastructure projects in the current fiscal year.

This is the second bond with the 2020/21 fiscal year after the re-opening and tap sales of FXD1/2012/15 and FXD2/2019/15 in December 2020.

Investors are required to submit their bids for the bond at a minimum of US$9,119 whose sale closes on 19th January 2021.

The bond has a value date of 25th January 2021 and the bids for the 16-year infrastructure bond close by 2 pm on 19th January 2021.

Investors will receive the first interest payment on this infrastructure bond on 26th July 2021 and every six months till 5th January 2037 as the final redemption of all outstanding amounts.

“Investors will receive the first Interest payment on this infrastructure bond on 26th July 2021 and every six months till 5th January 2037 as the final redemption of all outstanding amounts”

This Bond will be Tax-free as is the case for Infrastructure Bonds as provided for under the country’s Income Tax act.

The infrastructure bond will be listed on the Nairobi Securities Exchange and may be re-opened at a future date.

Secondary trading in multiples of US$456 will commence on 26th January 2021 for this infrastructure bond.

“We expect investors to bid aggressively for the bond with the CBK likely to accept more than its borrowing target due to high financing needs brought
about by a shortfall in revenue collection targets for short-amortized the current fiscal year,” Sterling Research said in its Fixed Income Report – January 2021 – “2021 get set, go!”

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.