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Kenya targets $233 million in 12-year bond tap sale

Staff Writer |
Kenya's Treasury returned to the debt market in a tap sale of this month's 12-year bond seeking to raise an additional $233 million a week after declining to pay investors a higher price on the paper.

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A tap sale allows the government to sell Treasury bonds from past issues, with the securities being issued at their initial face value and coupon rate, but sold at the current market value.

In the initial sale of the $291 million bond, the Treasury absorbed a paltry $58 million out of bids that amounted to 340 million.

This was an indication of government's reluctance to borrow expensively especially from commercial banks, which have switched to the securities following capping of interest rates.

Money raised from the project was to be used for funding projects in roads, water and energy sectors.

The tap sale will be open from Febraury 28 to March 2, and among other things, will help mop up money left in the market during the initial sale.

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