Kenya on Tuesday put up for sale an infrastructure bond worth 60 billion Kenyan shillings (about 433 million U.S. dollars) as the government sought to entice investors to lend it money amid a cash crunch.
The Central Bank of Kenya (CBK) said in a notice that the infrastructure bond, the largest in recent terms, would be tax-free and have a shorter tenor of seven years.
The paper will be sold until June 13, and the secondary trading at the Nairobi Securities Exchange will start soon after, the central bank said.
The Treasury bond has been floated with the two inducements — tax-free and shorter tenor — in a bid to woo investors who have given the long-term securities a cold shoulder since the government announced in April that it is facing a liquidity crisis.
Therefore, investors have in the past weeks preferred the shorter 91-day paper to avoid duration risks.
Kenya’s public debt currently stands at 67.8 billion dollars, with 35 billion dollars being external and the rest domestic.
The debt stood at 69 percent of the gross domestic product at the end of 2022, according to the World Bank.
The global lender noted that while the debt remains sustainable, the country is on the verge of debt distress. Enditem
