The Central Bank of Kenya (CBK) has reopened the sale of two fixed-coupon Treasury bonds seeking to raise Sh60 billion to support the government’s budget financing needs.
The offer, announced on Tuesday, September 8, comprises two bonds with maturities of 2039 and 2056, respectively.
The first bond, FXD1/2019/020, carries a coupon rate of 12.873 per cent and has 12.6 years remaining to maturity. It is due for redemption on March 21, 2039.
The second, FXD1/2026/030, offers a 12.5 per cent coupon rate and has 29.6 years to maturity. It will mature on March 13, 2056.
The offer opened on September 8 and will close at 10am on September 16, when the CBK will conduct the auction. The bonds will be issued through a multi-price auction and will attract a 10 per cent withholding tax.
Investors participating through active DhowCSD accounts can submit non-competitive bids starting from Sh50,000, with a maximum of Sh50 million. Competitive bids must be worth at least Sh2 million per CSD account for each bond tenor.
Successful investors are required to settle their payments on September 21, when secondary trading in the securities will also commence. The bonds will be listed on the Nairobi Securities Exchange and will qualify as statutory liquidity assets for commercial banks and non-bank financial institutions.
The CBK said successful bidders will be required to obtain their payment key and the amount payable through the DhowCSD Investor Portal or mobile application on September 18.
“Defaulters may be suspended from subsequent investment in Government Securities,” the CBK said, adding that it reserves the right to accept applications either wholly or partially, or reject them without giving a reason.
How to invest
Investors who do not have an active DhowCSD account must first register with the CBK before participating in the bond sale.
The registration process can be completed online using a mobile phone or computer with internet access.
Applicants are required to provide a valid email address, an active mobile number registered with a Kenyan mobile network, a Kenya Revenue Authority (KRA) PIN, settlement bank account details, a recent passport-size photograph and a valid identification document.
The CBK accepts identification documents including a national identity card, passport or alien card.
Applicants must complete the registration process within seven days. The CBK said incomplete applications are automatically deleted from the system after the seven-day period.
Once an application has been approved, the investor receives a username by email. The username, together with the registered email address, can then be used to access the DhowCSD Investor Portal or mobile application and participate in government securities investments.
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