Higher yields for investors in 297 mln USD Kenya's cash call

Investors have a chance to reap handsomely from Kenya's debt market as the country this month seeks to raise 297 million U.S. dollars from the domestic market for budgetary support at higher yields.

"The Central Bank, acting in its capacity as a fiscal agent for the Republic of Kenya, is offering the investing public an opportunity to invest in 15 and 20 years fixed coupon Treasury bonds," said the Central Bank of Kenya (CBK) in a prospectus Thursday.

The money is being raised through the sale of two Treasury bonds, of 15-year and 20-year tenors at an interest rate of 12.5 percent and 13.8 percent respectively, the highest in recent times.

The yields are higher than those of Treasury bills, which currently are at no more than 10.8 percent, an indication that investors stand a chance of making fortune.

Interest payment will start on Dec. 19 for the 20-year bond while for the 15-year on May 15 next year, according to the Central Bank, and will continue until 2028 and 2022 respectively.

Uptake of the bonds, which will be auctioned on Nov. 23 and listed at the Nairobi Securities Exchange and start trading on Nov. 29, is expected to be immense, according to analysts.

Last month, Kenya raised 302 million dollars for various infrastructure projects in the energy, transport and water sectors from the domestic market.

The money was raised through the sale of a 297 million dollars Treasury bond floated over a week ago, which was massively oversubscribed.

Last week, Treasury noted in its budget report for the next financial year that it would raise domestic borrowing by 25 percent this financial year to 2.9 billion dollars and cut foreign loans by 39 percent to 2.8 billion dollars from 4.6 billion dollars.

Kenya's domestic debt currently stands at 19 billion dollars as intensified borrowing in the coming weeks expected to push it up further. Endit