The National Treasury has raised Ksh241 billion from foreign investors who purchased the infrastructure bonds issued by the Central Bank of Kenya.
Going by the amount, the Treasury raised three times the figure it initially planned for. When announcing the sale of the infrastructure bonds on January 25, the Treasury sought to raise Ksh70 billion.
According to the National Treasury, the funds would go into infrastructure improvement in the country under the financial year 2023/24.
Oversubscription of the infrastructure bonds has since been attributed to investors' confidence in the country's monetary policies.
The move has also contributed to the stability of the Kenyan Shilling as foreign investors seeking the bonds utilise their dollars to buy the local currency.
Auction of the tax-free bonds lasted for three weeks and was conducted between January 24 to February 14, 2024, with the bonds set to attract interest twice a year starting in August.
According to John Gachora, Kenya Bankers Association Chairperson, most Kenyan banks placed bids in the infrastructure bond sale.
On January 25, CBK disclosed the repayment structure would involve payment of 20 per cent of the principal by February 15, 2027, with the outstanding principal amount repaid by August 9, 2032.
"The bond will be listed on the Nairobi Securities Exchange and will only be eligible for investors with active central securities depository (CSD) accounts with the Central Bank of Kenya," CBK noted in its January 25 statement.
According to CBK, the intermediaries in the deal would include the local banks, Non-Bank Financial Institutions, Licensed Stock Brokers and Licensed Investment Advisors.
However, the government warned that defaulters would be suspended from subsequent investment in government securities.
In 2022, the government issued infrastructure bonds worth Ksh75 billion and raised Ksh1 billion more than the amount, indicating investor confidence in Kenya.
