The Central Bank of Kenya (CBK) has invited Kenyans and interested investors to bid for government bonds valued at Ksh 70 billion.

The bond sale invites both individual and institutional investors to participate, with a minimum investment requirement of just Ksh 50,000. 

CBK announced that the bonds, meant for infrastructure development for the fiscal year 2024/2025, are tax-free.

“Central Bank of Kenya, acting in its capacity as fiscal agent for the Republic of Kenya, invites bids for the above bonds whose terms and conditions are as follows,” read the statement in part.

“The bonds will be tax-free as is the case for infrastructure bonds as provided under the income tax act.”

CBK Announces Tax-Free Ksh70 Billion Infrastructure Bonds

For investors looking for medium-term returns, the 11.8-year bond (IFB1/2022/14) with a coupon rate of 13.9380 percent could be a good choice.

However, long-term investors can choose the 15.1-year bond (IFB1/2023/17) offering a 14.3990 percent coupon rate.

The CBK will accept both non-competitive and competitive bids for the bonds.

For non-competitive bids, an individual or entity can invest up to Ksh50 million per CSD (Central Securities Depository) account per tenor with an exemption to State corporations, public universities, and Semi-Autonomous Government Agencies.

On the other hand, the smallest amount you can bid for is Ksh2 million per CSD account per tenor.

The sale period is set from January 23, 2025, to February 12, 2025.

“Treasury bonds bids must be submitted to the Central Bank of Kenya electronically via CBK DhowCSD or TMD by 10.00 a.m on Wednesday, 12th February 2025,” said CBK.

Meanwhile, the auction date is set for Wednesday, February 12, 2025.

Investors should obtain the payment key and amount payable for successful bids from the DhowCSD Investor Portal/App under the transactions tab on Friday 14th February 2025.

Defaulters may be suspended from subsequent investment in Government Securities.

Details of the Treasury Bonds Tap Sale 

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.

The bonds qualify for statutory liquidity ratio requirements for Commercial Banks and Non- Bank Financial Institutions as stipulated in the Banking Act CAP 488 of the Laws of Kenya.

Additionally, the bonds will be listed on the Nairobi Securities Exchange and are classified as non-benchmark bonds.

CBK stated that only investors with active CSD Accounts with the Central Bank of Kenya and the bonds may be re-opened at a future date.

Secondary trading in multiples 50,000.00 will commence on Monday, 17th February 2025.

“The Central Bank reserves the right to accept bids in full or part thereof or reject them in total without giving any reason,” said CBK.