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9yr CBK Kenya Infrastructure Bond
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muganda
#1 Posted : Tuesday, August 17, 2010 4:18:31 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
So received an email on the latest 9 year government of Kenya infrastructure bond issued by the CBK raising a whopping KShs 31.6 billion.

I had missed the last one and thought this new one would be my first foray into fixed income instruments - lakini sijui...
Any takers for this biggest bond issue ever???


ISSUE(S).......IFB2/2010/9
VALUE DATE.....30/08/2010
SALE PERIOD....06/08/2010 - 24/08/2010

TENOR....9yrs
AMOUNT...31.6 billion
PRICE Par/Discount/Premium

MINIMUM AMOUNT...100,000
COUPON RATE......6.00%

Download the Prospectus on the Infrastructure Bond
Download the Information Booklet
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Scooby
#2 Posted : Tuesday, August 17, 2010 4:30:09 PM
Rank: Member

Joined: 9/2/2006
Posts: 121
Hi muganda,

Am sitting out on this infrastructure bond.

The interest rate is quite low for such a duration. Though compared to the international market esp. in Europe and USA, the rate is high.

So, I won't be surprised if the bond issue is fully subscribed...or even worse, over subscribed. If that's happens, then the market is way overdue for a correction.

That's my view....let me see what the rest have to say.

Cheers
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qw25041985
#3 Posted : Tuesday, August 17, 2010 4:32:38 PM
Rank: User

Joined: 5/9/2010
Posts: 1,418
Location: Nai
@muganda. Who sent you the email ? Sterling investment bank ? Or who.
Your future depends on your dreams so go to sleep !
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Wa_ithaka
#4 Posted : Tuesday, August 17, 2010 7:15:20 PM
Rank: Veteran

Joined: 1/7/2010
Posts: 1,279
Location: nbi
6% won't meet the year on year rise in prices of your matharu, ugali or even keroro...

CBK is trying to encourage banks to lend to the wider economy rather than GoK. Can't see it working for the likes of BBK who struggle to make 6% profit per year.
The Governor of Nyeri - 2017
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ProverB
#5 Posted : Tuesday, August 17, 2010 7:55:37 PM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
..would have been nice if interest net of Tax was higher than inflation.. Sad Sad


on a lighter note..yet to get over the fact that i flunked Corporate Finance BBM 327 because my research was "tenability of universities financing capital projects..(such as residential halls) through issuance of bonds/term/commercial paper in the capital markets".smile smile


now it doesn't seem such an untenable proposal..
No wonder lecturers are a broke lot. d'oh!
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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bartum
#6 Posted : Tuesday, August 17, 2010 10:39:27 PM
Rank: Veteran

Joined: 8/11/2010
Posts: 1,011
Location: nairobi
ProverB wrote:
..would have been nice if interest net of Tax was higher than inflation.. Sad Sad


on a lighter note..yet to get over the fact that i flunked Corporate Finance BBM 327 because my research was "tenability of universities financing capital projects..(such as residential halls) through issuance of bonds/term/commercial paper in the capital markets".smile smile


now it doesn't seem such an untenable proposal..
No wonder lecturers are a broke lot. d'oh!

but iam not always broke
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muganda
#7 Posted : Wednesday, August 18, 2010 1:10:18 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@ProverB, interesting anecdote. In school, one is meant to learn theory not practice - so you deserved the fail smile

@Scooby @Wa_ithaka, not very attractive I agree, and so HUGE.

Now that Safaricom also want to come back to the market for their second tranche 4.5b (first tranche carried annual coupon of 12.25 percent), they may land in trouble for making the government won fail?
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gladiator
#8 Posted : Wednesday, August 18, 2010 2:13:15 PM
Rank: Member

Joined: 8/25/2006
Posts: 101
Remember that Infrastructure bonds are tax-exempt.

I also expect interest rates to maintain current levels for the next couple of years as CBK seems intent on lowering interests overall especially considering that inflation is now below 4% and it is trying to force banks to reduce their base lending rates.

The IB will also be amortized in the 6th, 7th and 9th year rather than simply just the 9th. In addition, previous IB bonds have been fairly liquid hence it should be easy to sell out early if need be

In my opinion then if you have some money you need to park safely to preserve capital for a while, it is a good investment.
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ProverB
#9 Posted : Wednesday, August 18, 2010 2:32:43 PM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
bartum wrote:

but iam not always broke

..
an exception to the norm! ..now stocksmaster ought to be a lecturer!
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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kyt
#10 Posted : Wednesday, August 18, 2010 3:24:03 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
at 6 per cent for 9 yrs! That is way low!
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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