Going through the latest prospectus for government of Kenya infrastructure bond 2023 on offer ->>> 6.5 year amortized bond : ISSUE NO IFB1/2023/6.5, I noted 5 things I would like to bring to your attention:
- Total Value: KSHS 50 Billion
- Tenor : Six and a half years
- (3 years and 6 months) bond for those who invest less than 1 million.
- Period of sale : 20th October 2023 to 8th November 2023
- Secondary Trading : Secondary trading in multiples of KShs. 50,000.00 to commence on Monday, 13th
November, 2023
- Secondary Trading : Secondary trading in multiples of KShs. 50,000.00 to commence on Monday, 13th
- Coupon Rate : Market Determined based on bids placed.
- Price Quote : Discounted/Premium/ Par
- Discount price- This is when the offer price falls below face/par value. In this case, the quoted yield is higher than the coupon rate.
- Premium – This is when the offer price is above the face/par value. In this case, the quoted yield is lower than the coupon rate.
- Minimum Amount : Kshs. 50,000.00 (previously used to be Kshs. 100k) so yay! This is a great development. Thanks Zakayo 🙂
- Interest Payment Dates:
- 13-May-2024
- 13-May-2024
- 11-Nov-2024
- 12-May-2025
10-Nov-2025 - 11-May-2026
- 9-Nov-2026
- 10-May-2027
8-Nov-2027 - 8-May-2028
- 6-Nov-2028
- 7-May-2029
- 5-Nov-2029
- 6-May-2030
- Taxation : The Bond will be tax free as is the case for Infrastructure Bonds as provided for under the
income Tax Act - Non-competitive bid
- – a bid, which is allocated at the weighted average interest rate determined during the auction.
- I suggest you go for this especially as a retail investor to avoid a case of your bid being rejected.
- Cut-off Price – interest rate limit (maximum rate) above which the bids will not be successful.
- Maximum Kshs. 50 Million per CDS account per tenor. This does not apply to State corporations, public universities and Semi-Autonomous Government Agencies.
- Competitive bid
- – a participating bid in the auction which is allocated according to the price/rate indicated in the bid.
- Placing agent – as a retail investor, just pick ‘none’ from the Dhow portal.
