CBK(Central Bank of Kenya) has invited bidders for two-reopened 30-year fixed coupon Treasury Bonds in the month of October, the second time it is coming to the market this month, seeking KSh 50 billion cash to support budget spending.
According to CBK prospectus, the first re-opened Treasury Bond, first sold in 2011, has a coupon rate of 12% and matures on 21st January 2041. The second debt instrument is a 30-year Treasury Bond, with a coupon rate of 12.5% and matures on 13th March 2056.
The CBK will conduct the auction for this sale on 14th October 2026 with a settlement date of 19th October 2026.
Meanwhile, the CBK accepted KSh 8.96Bn in its latest Treasury bond switch auction after receiving KSh 9.08Bn in bids against KSh 10Bn offered, translating to a 90.81% subscription rate.
The switch auction resulted in KSh 8.78Bn moving out of the three year and 15-year Treasury Bonds, which mature in 2027 and 2028, into a 15year Treasury Bond that matures in May 2033. Investors who participated will get a return of 12.6112%.
CBK has been floating switch Bond auctions as a liability management tool. This move helps the CBK avoid major lump-sum payouts and prevents debt rollovers from crowding out new budgetary borrowing.
Last week, Investor appetite for Treasury Bills increased as total submitted bids rose to KSh 47.72 billion compared to KSh 41 billion recorded week prior, of which the fiscal agent accepted KSh 41.19Bn resulting in the subscription rate of 86% and a performance rate of 170%; outperforming the subscription rate of 80%, recorded the prior week.
The 91-day Treasury Bill remained the most attractive debt instrument, registering a performance rate of 225% at last week’s T-bills auction.
The auction was significantly oversubscribed, receiving KSh 18Bn in bids compared to the KSh 8.0Bn on offer.
In the primary space, CBK released auction results, the first this month, for two reopened, 20-year and 30-year Treasury Bonds with coupon rates of 12.9% and 12.5%, respectively.
Investor demand was strong, pushing total bids to KSh 81Bn against an initial offer of KSh 60Bn. This resulted in an overall oversubscription rate of 161%.
Out of the bids received, the government accepted KSh 58Bn, achieving a 71% acceptance rate.
With the government expected to lean heavily on the domestic market to plug its budget deficits, borrowing demands will likely stay high, keeping consistent upward pressure on local yields over the medium term despite robust liquidity conditions.
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