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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenya seeks to borrow cheaply as it
floats US 291 million dollar T-bonds

NAIROBI (Xinhua) -- Kenya this month has put up for sale two Treasury bonds worth 291 million U.S. dollars for budgetary support as government seeks cheaper funds from the public.

The two five-year bonds, which are up for sale from March 12 to 21 at the Central Bank of Kenya (CBK), will later be listed at the Nairobi Securities Exchange’s secondary market from March 28.

“The Central Bank, acting as a fiscal agent for the Republic of Kenya, is offering the investing public an opportunity to invest in two five-year fixed coupon Treasury bonds for budgetary support,” said the top bank in a prospectus Tuesday.

Interest rate on the long-term papers, the third to be floated this year, has been set at 11.9 percent for both.

This is much lower than the 12.5 percent for last month’s paper and 13 percent for the January offer, both worth the same amount.

The CBK cancelled both the January and February bonds, which it later sold in tap sales as the Governor Patrick Njoroge said investors had offered bids that were outside the yield curve.

He warned that the institution would not hesitate to turn down high bids by investors seeking to capitalize on the government’s high appetite for funds.

By offering 11.9 percent, therefore, according to analysts, CBK is seeking to borrow cheaply and affordably.

For the past two weeks, the CBK has suspended the sale of 182-day Treasury bill to keep away investors targeting it for higher yields. The bill was returning higher yields at 10.6 percent than the 91 and 364 days bills.

 

             

 

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