CBK (Central Bank of Kenya) accepted bids worth KSh 20.1 Billion out of KSh 30 billion at a T-Bonds Buyback Auction that was conducted this Monday 17th November 2025. The State fiscal agent received bids worth KSh 34.3 Billion, an oversubscription of 114.32% as investors chased after higher returns in the Fixed Income Securities market.
CBK will be paying a return of 7.0819% to successful bidders against a coupon rate of 14.2280% when the paper was first sold, implying those still holding the instrument to maturity, will still earn higher returns. The weighted average rate for this three-year bond stands at 7.7806%.
CBK rejected bids from investors who were asking for higher returns, amounting to KSh 14.4 Billion.
The State Fiscal Agent came to the market for a bond buyback, aiming to partly settle in advance, this 3-year Treasury Bond first issued in May 2023.
This offer targeted a redemption of KSh 30.0bn, whose total outstanding amount is KSh 76.5bn—translating to a 39.2% potential settlement.
Long-term Investors who currently hold this three-year Treasury Bond, especially pension funds, could have been keen on not holding the bond to maturity given its coupon rate 14.23%, against 14.18% for the 25-year paper currently on offer.
CBK Offers in the Fixed Income Securities Market
Investors in the Bond Market are rushing for the offers to address potential reinvestment risk if yields in the market fall even further, should the three-year paper be held till May 2026.
CBK has adequate cash from previous auctions, which enabled it purchase the paper, giving it the flexibility of rejecting the more expensive bids.
Successful investors in this latest buyback auction will get payments on 19th November 2025, which incidentally is same date as the bids closure and auction for the ongoing reopening issuance sale.
In tomorrow’s auction, Wednesday 19th November 2025, CBK is seeking KSh 40 Billion for Budgetary support through sale of two 15-yr and 25-yr Treasury Bonds, with coupon rates of 12.3% and 14.2% respectively.
ALSO READ:CBK Seeks Another KSh40Bn for Budgetary Support in Nov
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