The Central Bank of Kenya, on behalf of the government, has put on offer a new issue 15- year Infrastructure Bond (IFB 1/2018/15) this January.
The amounts raised will go into the funding of Infrastructure projects in the FY 2017/18 Budget Estimates.
According to the Central Bank of Kenya, the Bond will be tax free as is the case for all Infrastructure Bonds as provided for under the Income Tax Act carrying a coupon of 12.5 percent.
The bank will receive bids for the bond until Tuesday, 23rd January 2018 and auction it on Wednesday, 24/01/2018.
The Bond may be re-opened at a future date.
“The month’s 15 year amortized Infrastructure bond (IFB) to be auctioned next week could prompt investors to hold off from locking funds in this week’s Treasury bill auction in a bid to enable them to participate in the IFB auction,” notes Stephanie W. Kimani Research Economist at Commercial Bank of Africa.
The government is still behind its domestic borrowing target for the current fiscal year, having borrowed Kshs 101.1 bn, against a target of Kshs 220.9 bn (assuming a pro-rated borrowing target throughout the financial year of Kshs 410.2 bn budgeted for the full financial year as per the Cabinet-approved 2017 Budget Review and Outlook Paper (BROP)).
