For: To finance roads, geothermal steam wells, sewers, and other dilapated infrastructure that is holding back economic growth
Amount to be raised: Ksh18bn
Minimum application amount: Ksh100k and in multiple of Ksh50k thereafter
Maximum application amount: Ksh10mn
How do I apply? Open CDS account at CBK office (Nairobi, Kisumu, Mombasa, Eldoret)
And if in Diaspora: not yet...
Application Dates: 28 January to 18 February 2009
Upside: 12.5% per annum paid every 6 MONTHs on outstanding amount, so first payment in August
Downside: None. GoK has never defaulted
Subscription: Likely to be oversubscribed
8 comments:
what happens in case of a massive oversubscription?
For the kenyans in the diaspora who already have CDSC accounts with the stockbrokers, they can apply through them...through a nominee account.
ka-investor: There will be no major over-subscription. CBK will pick the best bids i.e. those who bid the highest.
12.5% is just the COUPON RATE. The yield could be lower or higher. And there is the matter of w/tax paid if discounted & on interest.
The offer is very attractive for anyone who has burnt his/her fingers at the NSE.
@Concept--This is not the time to use brokers for nominee accounts. I tis very risky.
I wonder if we have competent town/municipal/city leader who can launch a municipal bond?
We need smaller towns to grow and decongest Nairobi
Bonds should be left for high net worth individuals looking to preserve and/or diversify their wealth.
That said, 12.5% paid twice a year is very attractive, especially if you are a pensioner.
What is the maturity period for this bond?
http://www.centralbank.go.ke/downloads/bonds/Launch%20of%20Infrastructure%20Bond.pdf. For fuller details...
Ka-investor: more here http://www.centralbank.go.ke/treasurybonds/bonds_auction.html
Concept: I'd have recommended use of nominee account. 2 years ago. If brokers can eat from CDs, nominee will be even worse.
CT:no w/h tax
EmpowerK: Municipal bond might be tricky given many municipals have malnourished cash flows.
Ssem: I think you saw the situation at home.
Shanga: 12yrs
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