Nairobi, April 8 -- The central bank is set to test the market's appetite for long term bonds with the first 30-year paper since 2011, hoping to set a new benchmark rate for long-term domestic debt through the sale.

Annual interest or coupon on the new 30-year bond has been set at 12.5 percent, which after withholding tax of 10 percent gives investors a net return of 11.25 percent.

By setting the bond's interest rate ahead of the sale, the Central Bank of Kenya (CBK) is departing from the usual practice of letting the markets determine the return or coupon of new bonds. It also reflects the lack of a comparative bond of a similar tenor in the secondary market, whose yield would act as a guide for investors on the bidding levels for the ...