Infrastructure Asset Backed Security – Linzi Finco 003
Kenya’s first infrastructure asset backed bond, (Linzi 003) received a 100.2% oversubscription of KES 44,875,600,00 against a government target of KES 44,791,000,000, while the government accepting KES 44,791,000,000. The Linzi 003 notes will be backed by the future revenues from the Talanta City Stadium.
The security’s internal rate of return (IRR) is priced at 15.04% per annum, paid semi-annually within a 15-year tenure. Interest income accruing to noteholders from this asset backed security is tax exempt from both withholding tax, capital gains tax and stamp duty as is the case to other infrastructure bond papers.
The Linzi 003 notes will was listed for trading at the Nairobi Securities Exchange on the Restricted Fixed Income Market Sub-segment (RFISMS, a sub-segment of the Fixed Income Securities Market Segment (FISMS). The paper will in multiples of KES 100,000 with the same amount being the minimum for trading, reserved mainly for corporate investors.
[Graph in pdf]
The Linzi 003 funds are expected to fund the construction of Talanta Sports Stadium (Talanta Sports City), in preparation to host the African Cup of Nations in 2027. The stadium located along Ngong Road, Nairobi cultural and economic business bub, is projected to hold a capacity of 60,000 people.
The stadium is envisioned to encompass an elite training centers with four indoor halls for both football and rugby.
The total stadium costs are estimated at USD 25o million or KES 32.28Bn. The rest of the finances is projected to finance other infrastructure expansions including the Ngong Road Flyover, satellite pitches among other infrastructure facilities.
The Linzi Finco 003 remains a good investment offer especially for long-term investors looking for some high and tax free returns. This includes insurance firms, pension funds, and fund managers among other investors. This forms part of investment diversification as a measure of risk diversification.
