This archive report was first published on 28 October 2019.
On October 28, 2019, the government successfully raised Sh68.4 billion from a 16-year infrastructure bond, exceeding its target of Sh60 billion.
The bond, which was issued by the Central Bank of Kenya (CBK), was heavily subscribed, with investors offering Sh86.94 billion but Sh18.48 billion being rejected.
According to analysts, the tax-exemption element and the long tenor of the bond drove in both retail and high net worth individuals and firms.
"The rate fell within market expectations. Considering the environment of low interest rates where all IFBs have been trading at below 12 percent; this was definitely a pickup in the yield," said Kenneth Minjire, Head of Fixed Income Desk at Genghis Capital.
Minjire noted that the bond's tax-exempt status and long tenor made it attractive to investors, leading to heavier bidding.
The bond will be redeemed in phases, with the first redemption scheduled for October 2030 and the last one for October 2035, which is also the full maturity date of the issue.
