CBK Reopens Three Fixed Coupon Treasury Bonds worth Ksh 50B

The Central Bank of Kenya (CBK) has reopened three Treasury Bonds and invited bids from the public. The floated bonds aim to service budgetary support to the government and intend to raise Kshs. 50 Billion

The coupon/interest rates for the bonds are 11.7% for the 3-year Bond (FXD1/2022/03), 12.3% for the 10-year Bond (FXD2/2019/10), and 13.4% for the 20-year Bond (FXD1/2021/20).

The period for submitting bids closes at 2.00 pm on 16/08/2022, with the minimum investible amount of Kshs. 50,000. Successful bidders/investors should obtain details of amounts required for successful bids from the CBK on 18/08/2022.

Successful bidders will know the status of their application on 17/08/2022, when auction results will be published. It is important to note that bids will be allocated on first-come-first-served criteria.

Interest earned will be subject to a withholding tax of 15% for the 3-year bond and 10% for the 10-year and 20-year bond.

Only investors with active CDS accounts with the CBK are eligible to apply. You can apply directly at the CBK offices if you do not have one.

Alternatively, you can approach a commercial bank as an authorized placing agent. Banks usually have active CDS accounts with the CBK though they charge extra fees to the investor who uses them.

Final Note

Treasury Bonds are safe investments that greatly add to your investment portfolio. They pay interest every six months till maturity. This means you are almost guaranteed to receive an interest of 13.44% (excluding taxes) for 20 years if you purchase the 20-year bond.

For more information, here is an article we wrote about Treasury Bonds and how to purchase one through the CBK.