- The Central Bank of Kenya (CBK) has reopened bids for the FXD1/2018/25 Treasury bond, seeking to raise KSh 25 billion in domestic debt
- The bond carries a fixed coupon rate of 13.4% and has a remaining tenor of 18.3 years, with the auction date set for March 10, 2025
- Investors must submit bids by March 5, 2025, with non-competitive bidders required to invest at least KSh 50,000, while competitive bids start at KSh 2 million per CSD account
- Successful bidders must make payments by March 7, 2025, through the DhowCSD portal, and defaulters risk suspension from future government securities investments
Elijah Ntongai, a journalist at TUKO.co.ke, has more than four years of financial, business, and technology research and reporting expertise, providing insights into Kenyan and global trends.
Nairobi – The Central Bank of Kenya (CBK) has reopened bids for Treasury bond as it seeks to raise KSh 25 billion in domestic debt.
Source: UGC
The CBK, acting in its capacity as fiscal agent for the Republic of Kenya, has invited Kenyan investors to submit bids for the FXD1/2018/25 Treasury bond, which carries a fixed coupon rate of 13.4% and a tenor of 18.3 years.
Prospectus for reopened Treasury bond
According to a prospectus released by CBK, the bond’s auction date is set for March 10, 2025, with interested bidders required to submit their applications by March 5, 2025, at 10:00 a.m.
Investors participating in non-competitive bidding can apply with a minimum of KSh 50,000, while competitive bidders must place bids starting from KSh 2 million per Central Securities Depository (CSD) account.
The bond will attract an accrued interest of KSh 3.0923 per KSh 100. Notably the bond will also attract a 10% withholding tax on earnings.
CBK noted that payments for successful bids will be processed on March 7, 2025, through the DhowCSD investor portal.
“ALL successful bidders should obtain the payment key and amount payable from the DhowCSD Investor Portal/App under the transactions tab on Friday, March 7, 2025. Defaulters may be suspended from subsequent investment in Government Securities,” CBK warned.
Secondary trading and rediscounting
CBK has also announced that secondary trading for the bond will begin on March 10, 2025, in multiples of KSh 50,000 via the DhowCSD platform.
Investors looking for liquidity before maturity can opt for rediscounting, which will be offered at 3% above the prevailing market yield or coupon rate, whichever is higher.
“The Central Bank will rediscount bonds as a last resort, at 3% above the prevailing market yield or coupon rate whichever is higher, upon receiving written instructions from investors via the email rediscounts@centralbank.go.ke,” CBK said in the prospectus.
The bond matures on May 25, 2043, and may be reopened for future bids. CBK retains the right to accept or reject applications in full or in part without explanation.
Source: TUKO.co.ke