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Central Bank of Kenya governor Prof Njuguna Ndung’u. Photo/FILE 

The Central Bank of Kenya as the Fiscal Agent of the Ministry of Finance, is offering for sale to the savers and investing public a 30-year Savings Development Bond.

This is a Treasury bond aimed at promoting a savings culture while at the same time providing a window of opportunity for a risk free high return investment for savers.

The bond will be listed at the Nairobi Stock Exchange for Secondary Trading and be eligible for collateralisation of financing facilities, that is you can use it as a security in banks.  

In terms of returns, the bond bears an attractive high yielding return.

The bond on offer attracts a coupon rate of 12 per cent per annum payable semi-annually.

The coupon rate is a guide for pricing of the instrument. The determining price will be the market weighted average interest rate of the bids accepted.

The bond has been issued in furtherance of the savings objective of Vision 2030.

The sale period for the bond runs from 3rd – 22nd February 2011, and the auction will be held on 23rd February 2011.

The proceeds from the sale of this bond will support the Ministry of Finance and the government on the development of public social and economic programmes including implementation of the recently promulgated Constitution as per the budget proposal for this fiscal year.

Residents or non-residents, individuals and/or corporate bodies who hold a Central Depository System (CDS) account with Central Bank of Kenya and who are also holders of an account with a financial institution domiciled in Kenya can invest in all Kenya Government Securities including this bond.

Any potential investor is allowed to open a CDS account directly with the Central Bank of Kenya at the head Office in Nairobi or at any of its branches in Kisumu, Eldoret or Mombasa or at the Nakuru and Nyeri Currency Centres.

However, the Central Bank is making it easier to open CDS accounts through the following institutions and their branches countrywide: Kenya Commercial Bank, National Bank of Kenya, Co-operative Bank of Kenya, Equity Bank and Kenya Post Office Savings Bank.

Opening a CBK-CDS account is FREE of charge. Investors outside Kenya can open CDS accounts as nominees through CBK Authorised Agents including commercial banks, stock brokers, investment banks and advisors licensed by the Capital Markets Authority.

Since the Central Bank is committed to ensuring accessibility of financial products to all Kenyans, we have set the minimum investible amount in this bond to Sh50,000.

Prof Ndung’u is the governor, Central Bank of Kenya.

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