The Central Bank of Kenya(CBK) has re-opened two 20-year Fixed-Coupon Treasury Bonds in June 2021, seeking KSh30 Billion from the domestic money market for budgetary support.
According to the prospectus issued by the CBK, the two 20-year T Bonds being sold between 2nd June 2021 and 15th June 2021 were first floated in 2019 and 2020 and have a maturity of 17.9 years and 11.4 years, respectively.
CBK offer to investors
They will carry a coupon of 12.87% for the 2019 paper and 12% for the 2012 issue. The redemption rate for the 2019 bond is 21st March 2039, while that for the 2012 bond is 1st November 2032.
Duly completed bond application forms must be submitted to any branch of the Central Bank of Kenya by 2.00 p.m; on Tuesday, 15th June 2021, with the Auction Date slotted for Wednesday, 16th June 2021.
The Central Bank will rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher, upon written confirmation from the Nairobi Securities Exchange(NSE).
Secondary trading in multiples of KSh50,000.00 of these bonds, which will be listed at the NSE, commence on Tuesday, 22nd June 2021.
The re-opened KSh 30Billion worth Treasury Bonds sale happens at the end of the Government’s 2020/21 fiscal year. The smaller amount is an indication of eased pressure at the National Treasury for liquidity.
With expectations of disbursements from the World Bank and the International Monetary Fund in the next few weeks, this will further ease liquidity pressures in the economy.