Treasury takes Ksh.98.6 billion from February infrastructure bond

This to surpass its target of raising Ksh.75 billion after investors bid Ksh.132.2 billion to represent a 176.3 per cent performance rate on the issue.

The high performance of the issue was largely pre-empted given the bond’s tax free attraction even as the money market witnessed liquidity tightness at the end of last month.

“We expect the bond to be oversubscribed due to the tax-free nature of the bond. Additionally, prevailing political and pandemic related risks has seen investors prefer longer dated tenors,” analysts at AIB- AXYS Africa had stated in a note on Monday,

The bond’s market-determined yield has rounded off to 12.965 per cent with the Central Bank of Kenya (CBK) rejecting expensive investor bids.

Ksh.95.8 billion of the funds raised will be applied to new borrowing while the balance of Ksh.2.9 billion will settle outstanding redemptions accruing to the exchequer.

The high subscription rate on the infrastructure bonds reveals renewed money markets liquidity alongside the continued attraction of government securities to investors.

The outcome leaves the government well ahead of its domestic borrowing program for the 2021-2022 financial year which closes in June.