Markets & Finance

Treasury eyes Sh16bn from reopened bond sale

CBK

CBK says the reopening will run from December 15 to December 31, but the offer may close earlier once the target amount is realised. PHOTO | FILE

The Treasury has returned to the market for the Sh16 billion it failed to net during the sale of the Sh30 billion nine-year infrastructure bond earlier this month.

Central Bank of Kenya (CBK) on Tuesday said the tap sale (reopening) will run from December 15 to December 31, but the offer may close earlier once the target amount is realised.

In the initial sale of the amortised bond, investors put in 719 bids worth Sh16.57 billion against the Sh30 billion target, at a weighted rate of 14.95 per cent. The government accepted 636 bids worth Sh13.96 billion, at a rate of 14.75 per cent.

“Bids shall be priced at the weighted average rate of the accepted bids for the bond auction held on December 9 and adjusted for accrued interest,” said CBK in the notice announcing the tap sale.

The minimum investment required for the infrastructure bond is Sh100,000 with additional amounts in multiples of Sh50,000, unlike other bonds whose minimum is Sh50,000.

The 55 per cent performance rate of the initial bond sale went against expectations of an oversubscription, given its tax-free status and that its yield would be market determined.