National Treasury building. [Photo/the-star.co.ke]
The government has raised Sh42.02 billion against a target of Sh30 billion from this month’s seven-year infrastructure bond, representing a subscription of 153 per cent.
The oversubscription was unexpected considering the constrained liquidity environment witnessed in the past few weeks.
The bond, which was deemed short tenored—considering that most infrastructure bonds tend to be nine or 12 years—is expected to fund projects in the roads (Sh10 billion), energy (Sh15 billion) and water (Sh5 billion) sectors.
Treasury received bids of Sh45.9 billion and accepted Sh42.02 billion.
Genghis Capital analysts say there is possibility of reopening with an estimated Treasury limit on the bond put at Sh50 billion.
“There is still Sh8 billion they can issue on tap sale,” they said.
The weighted-average accepted rate stood at 12.232 per cent against a market average demand of 12.279 per cent.