Kenya floats 297 million USD Treasury bond for infrastructure projects
Nairobi, Kenya (Xinhua + DIPLOMAT.SO) – Kenya is this month seeking to raise 297 million U.S. dollars from the domestic market for infrastructure projects in the energy, water and transport sectors.
The East African nation is carrying out a number of infrastructure projects that include construction of power plants and bypasses funded by both donors and the government.
The money would be raised through the sale of a 15-year Treasury bond at an interest rate of 12 percent, which is lower than the yield of the bonds offered last month, which stood at 15 percent.
The rates have been falling due to high bidding on all government securities offers from Treasury, particularly by commercial banks which have shifted to the stocks to make up for rate capping.
“The Central Bank, acting in its capacity as a fiscal agent for the Republic of Kenya, invites bids for the 15-year infrastructure bond,” said the Central Bank of Kenya (CBK) in a prospectus Tuesday.
The bank noted that the money will be used for partial funding of projects in the road (100 million dollars), energy (100 million dollars) and water (100 million dollars) sectors.
Interest payment will start next year on April 24, according to the Central Bank, and will continue semi-annually until June 10, 2031.
Uptake of the bond, which will be listed at the Nairobi Securities Exchange and will start trading on Oct. 25, is expected to be immense, according to analysts.
Last month, the government floated 5-year and 20-year Treasury bonds worth 248 million dollars for budgetary support, and ended up receiving bids worth 558 million dollars. The Treasury accepted bids worth over 348 million dollars.
Kenya’s domestic debt currently stands at 18 billion dollars, with the amount having ballooned in the last three weeks as the government seeks to capitalize on falling yields to borrow more cheaply from the public.For more news and stories, join us on Facebook,Twitter , or contact us through our Email: firstname.lastname@example.org, email@example.com