The Central Bank of Kenya’s seven-year infrastructure bond (IFB) was oversubscribed by 53.64 percent.
In the auction, CBK received bids worth Ksh 45Bn and accepted Ksh 42Bn; Ksh 2Bn higher than the advertised issue of KES 30Bn and the additional green-shoe amount of Ksh 10Bn.
“The IFB1/2017/007 saw a massive oversubscription by 53.64 percent. This was entirely unexpected considering the constrained liquidity environment witnessed in the past few weeks,” noted Genghis Capital Analysts.
The infrastructure bond (IFB), seeks to raise Ksh 30 Billion to be allocated to Roads (Ksh 10 Billion), Energy (Ksh 15 Billion), and Water Ksh 5 Billion).
“We posit the given limit by the National Treasury on this particular IFB at KES 50Bn, meaning there is still KES 8Bn they can issue on Tap-Sale,” they note.
The weighted-average rate (WAR) settled in at 12.232 percent against a market average of 12.279 percent.
The accepted yield is 45bps above the pre-auction market level on a similar tenor infrastructure bond.