The National Treasury has resumed its domestic borrowing program ahead of the start of the 2022-23 financial year as it seeks Ksh.60 billion bonds.
The Central Bank of Kenya (CBK), the exchequer’s monetary agent, has issued two prospectuses that encompass the extended sale of recently issued papers including an infrastructure bond.
The first prospectus covers Ksh.20 billion from the tap sale of June’s infrastructure bond whose primary sale had raised Ksh.73.8 billion against a higher Ksh.75 billion target.
The tap sale which runs to Thursday next week will offer investors a return of 13.742 per cent.
The second prospectus meanwhile which aims to raise Ksh.40 billion covers two re-opened fifteen year bonds with tenures of 5.8 and 11.3 years to maturity.
The pair of bonds which will be on sale until July 19 have coupon rates of 12 and 12.75 per cent respectively.
The CBK will be betting on the re-opened issues to drive down the cost of borrowing/interest rates even with investors expected to widely demand a premium in taking up the bonds on offer.
The new bonds prospectuses come barely a week after the National Treasury closed its local borrowing program for the 2021-2022 financial year.
The exchequer is set to greatly leverage the local domestic debt market to meet the budget deficit for the upcoming fiscal year.
Net domestic borrowing for the new 2022-2023 financial year is estimated at Ksh.570.2 billion.