This month the government will again offer a 15yr pibo .Minimum investment is 100k and additional in multiples of 50k.The interest rate is 12% and is not taxed .PIBOs are the only type of securities not taxed .It is usually bought at a discount you may end up paying 95k.Then every six months you receive 5334 as interest for the next 15yrs .Then at the end of the 15yrs get your 100k despite paying 95k.Should you need your money before that you can sell the bond in the secondary market and get your principal or use it as security to get a loan.Ive tried to simplify it omitting ,some details on the fact that they may give you part of the principal amount after 5yrs this is written on the bond’s prospectus.
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i smell a fat rat
my friend government securities are the safest investment
Safi kabisa. 12% without WHT is quite a good return. Better than some real estate projects.
i think one needs like 50m n above to enjoy this offer …my take
Thanks for the info but was wondering whether there is a website I can get more info?
Found it!
Sadly it appears as if it’s closed already (18 Oct) atleast according to this document.
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They are doing what is called tap sales selling the same bond next month
The Treasury has opened a second sale of this month’s infrastructure bond, seeking an additional Sh10 billion above the Sh30 billion raised last week.
CBK said the reopened (tap) sale will run from October 25 to November 3 with investors taking up the second offer earning the same interest as that of the initial bond sale.
At last week’s initial sale of the tax-free 15-year tenor infrastructure bond, investors offered Sh35 billion, with the government taking Sh30.6 billion at a rate of 13.17 per cent.
Analysts say the new sale is targeting both the excess offers from the initial sale as well as maturities of existing debt.
“This tap sale comes in immediately after the maturities of the amortised one-year bond issued last year were paid out yesterday, an indication CBK is targeting these maturities,” said Genghis Capital in a fixed income brief on Tuesday morning.
A successful tap sale will therefore bring the total proceeds from the bond issue to Sh40 billion, which was the maximum the government had set out to get from the issue.
These funds are meant to fund projects in the roads sector (Sh10 billion), energy (Sh10 billion) and water (Sh20 billion).
This is the second infrastructure bond sold this year after the nine-year offer in May, which raised Sh34 billion at a rate of 13.34 per cent.