CBK Opens Ksh50 Billion infrastructure bond sale after rejecting majority of August bids

The Central Bank of Kenya (CBK) has launched a fresh infrastructure bond sale worth Ksh50 billion.

In a statement released on Tuesday, August 19, the CBK announced that the funds will be raised through the reopening of two infrastructure bonds IFB1/2018/015 and IFB1/2022/019. The sale will run until Thursday, August 21, or until the target amount is reached, whichever comes first.

The offer comes just days after the CBK declined 70.7% of bids submitted in the previous auction, citing pricing concerns and market discipline.

Investors will be served on a first-come, first-served basis, and bids will be priced at the average rate of accepted bids from the August 18 auction, adjusted for accrued interest. The bonds offer attractive interest rates of 12.5% for the 15-year IFB1/2018/015 and 12.965% for the 19-year IFB1/2022/019.

CBK has set discounted adjusted average prices for both bonds. According to the bond prospectus, IFB1/2018/015 is priced at Ksh99.3937, while IFB1/2022/019 is offered at Ksh94.8458.

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This means investors will pay Ksh99.39 and Ksh94.85, respectively, for every Ksh100 of face value this makes the bonds more accessible and more profitable.

Successful bidders will be notified on Thursday, August 21 at 2 p.m. (tomorrow), or earlier if the full quantum is achieved. Payments and settlement must be completed by Monday, August 25 at 2 p.m.

Investors are advised to check the DhowCSD Investor Portal or App on Friday, August 22 for details on amounts payable for successful bids. The portal will provide transaction breakdowns and facilitate payment processing.

The infrastructure bonds are part of Kenya’s strategy to finance key development projects, including roads, energy, water, and public utilities.

By Masaki Enock

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