I saw this on news. What is the lock-in period? That will determine how attractive it is. Many investors do not want their money locked in without any chance of exercising their right to exit should a better opportunity come calling.

This bond will mostly be taken up by fund managers and the NSSF I dont think there is any bank that will dare touch this as it will be almost impossible to trade it on the secondary market just look at the 25 year bond those still holding are stuck with the paper

too low a return for 30 years...does anyone beleive kes interest rates can fall any lower? if the market turns as it most likely will u face a major revaluation loss

it is not a wise investment! cbk are trying to lock in funds for 30years at a time when inflation and rates are surging...surely people...anyway its ur money guys

@amolo; Life expectancy of a fetus/foetus is not same as for a baby, neither is it same as for a 45yr old. Or is it 0 for 45 yr old? So it varies with your age.

its better than what many insurance co's are giving. Plus if you have the cash and don't feel like playing the market, why not. As @ 2012 said if you have 2m, then you've got school fees for some good school.

Ati 15%? And you'll still expect banks to give mortgages at below 15% while they can put it here where there's guaranteed returns?

I personally don't think it's too bad after all and if I'm not wrong if you compound 1m at 12.5% x30yrs it's well over 30m. Fantastic way to save for retirement ama?

though rental income will not remain static for the next 30years, the coupon however will

theres also a risk that in 30 years teh country u know as kenya may cease to exist.....if u think im talkin nonesense ask the guys holdin the ivory coast euro bond..this argument is not about risk per se..its about return

@ All
I tend to agree with @ Kizee1. 12% is TOO low for 30 years.
If you look at the latest 10 year bond dated 31/1/2011, the coupon was 9.307%. However the yield was higher at 9.683%.
Interesting fact was that bids were 17,694 Billion. However CBK only accepted 1,086 Billion. That is only just over 6% of bids !!!

Why. I think investors have seen that the government is hungry for local funds. The investors sense this and putting in higher bids.

If you look at the 91/ 182/364/ trend, yields have been going up since Oct. 2010.
I dont see this trend changing any time soon.

Also dont forget that in 2008, 182 day bills were paying about 9%

It IMO that the 30 year bond will have a lot of bids, but CBK will only accept a very little proportion. Unless it is in dire needs of funds.

Which ever way it goes the coupon is 12%, but the actual yield will be much higher - maybe 14%.

I think in a few years, we may see 2 year bonds giving 9% yields.
My 2 cents - though I manage a few clients who invest with CBK.