Kenya Treasury bonds · auction of 23 May 2016
Kenya bond auction, 23 May 2016: IFB1/2016/009 at 13.339%
The Central Bank of Kenya's bond auction dated 23 May 2016 was a primary issue of FXD2/2016/002 and IFB1/2016/009.
Bids came to KES 80.9bn against KES 30.0bn on offer (270% subscribed), and the Treasury accepted KES 39.6bn.
FXD2/2016/002 cleared at 12.020%, against a 12.020% coupon, with 2.0 years to maturity.
IFB1/2016/009 cleared at 13.339%, against a 12.500% coupon, with 9.0 years to maturity.
What this means for KES 100,000 of IFB1/2016/009
Worked from the published result · information, not advice
KES 6,250 every six months, tax-free, for 9.0 years
At this auction KES 100,000 of face value cost about KES 96,112 (price 96.112 per 100), and the yield that implies is 13.34% a year. The coupon is 12.50%: KES 12,500 a year on KES 100,000 of face value, paid in two halves, with no withholding tax on an infrastructure bond.
Held to maturity (2025-05-12), that is about KES 112,115 in coupons, plus KES 3,888 gain between what you paid and the KES 100,000 repaid; roughly KES 116,003 in all.
Sold before maturity, the price moves with rates: if yields rise, the bond is worth less; if they fall, more. The Central Bank’s minimum bid is KES 50,000. Compare with bills, funds and deposits after tax →
Results
By bond
| Bond | Sale | Yield | Coupon | Years left | Bids | Accepted | Price /100 |
|---|---|---|---|---|---|---|---|
| FXD2/2016/002 | primary | 12.020% | 12.020% | 2.0 | KES 41.51bn | KES 4.73bn | 100.000 |
| IFB1/2016/009 | primary | 13.339% | 12.500% | 9.0 | KES 39.43bn | KES 34.90bn | 96.112 |
Source: Central Bank of Kenya result notice · the PDF these figures were read from
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