CBK Raises Ksh 26.40B in the 15 Yr Infrastructure Bond

The Central bank of Kenya (CBK) raised Ksh 26.40 Billion against a target of Ksh 30 billion from the  15 year re-opened Treasury Infrastructure bond.

The issue was oversubscribed by 30 per cent amounting to Sh 39.073 Billion but CBK accepted only Sh 26.409 Billion.

“Despite the over-subscription, the regulator rejected about KES 12.66Bn in bids; clear indicator that CBK is adamant in keeping a low interest rate environment,” noted Genghis Capital Analysts.

Competitive bids were Sh 22.177 Billion versus non-competitive bids which amounted to Sh 4.232 billion.
The bond had been floated  at a coupon rate of a 13.500 percent.

Analysts had projected bids at a range of 12.5 percent and  12.8 percent.

“Given that the bond (FXD 2/2007/15) is currently priced in the secondary market at a yield of 12.5%, we expect investors to bid close to the secondary market yield, and therefore we would bid at a range of between 12.5% – 12.8%,” Cytonn Analysts.

Genghis Capital Analysts had stated that, “The 10-year to 15-year bonds are currently trading at sub 13 percent levels with an issue along these tenors likely to see a high of 13.10 percent.”

The market weighted average rate came in at 12.65% while the market accepted rate for the FXD2/2007/015 stood at 12.52%, an indication of discipline in bidding.