Treasury bond auction attracts Sh32bn
Posted Wednesday, January 23 2013 at 18:09
The five and 20-year bond auction on Wednesday attracted bids worth Sh32.347 billion, more than double of what the Central Bank of Kenya was seeking.
The sale of the two re-opened bonds was seeking Sh15 billion, meaning that the auction was oversubscribed by 115.65 per cent.
According to the results, the banking regulator accepted bids worth Sh22.077 billion which is Sh7 billion more than it had asked for.
The results of the auction also show that most investors went for the five-year bond which attracted Sh26.069 billion of the bids while the 20-year bond attracted bids worth Sh6.278 billion.
The five year and 20-year bonds will pay interest at an annual rate of 11.855 and 12 per cent respectively every six months.
Investors will also get a discount at an average rate of 12.791 per cent for the five year bond and 13.548 per cent for the twenty year bond meaning that for every Sh100,000 invested, an investor will get Sh3,080 and Sh11,520 before tax respectively if they hold the bonds till maturity.
The 182-day Treasury bill auction managed a 33 per cent subscription rate having attracted Sh998.5 million against the Sh3 billion it was seeking.