The Central Bank of Kenya (CBK) has opened a new bond sale offering Ksh 70 billion in government bonds, providing both individual and institutional investors an exciting opportunity to invest in the country’s infrastructure development. The bond sale, which is aimed at funding infrastructure projects for the 2024/2025 fiscal year, is open from January 23 to February 12, 2025.
Investors can participate with a minimum investment of Ksh 50,000, making it accessible to a wide range of Kenyans and international investors. The bonds are tax-free, aligning with the provisions under the Income Tax Act for infrastructure bonds. This means investors can enjoy tax-exempt returns, making these bonds an attractive option for those seeking steady and reliable income.
CBK is offering two bond options, each suited to different investment horizons. For medium-term investors, the 11.8-year bond (IFB1/2022/14) offers a coupon rate of 13.9380 percent. Long-term investors, on the other hand, can opt for the 15.1-year bond (IFB1/2023/17), which offers a higher coupon rate of 14.3990 percent.
Both non-competitive and competitive bids are accepted, with the latter requiring a minimum investment of Ksh 2 million per CSD (Central Securities Depository) account per tenor. Non-competitive bids allow investors to place bids up to Ksh 50 million per CSD account per tenor. State corporations and public universities are exempt from the investment limits.
The auction will be held on February 12, 2025, and successful bidders will be required to settle their payments by February 14. CBK has also warned that defaulters may be suspended from future government securities auctions.
