CBK (Central Bank of Kenya) recorded a strong demand at this week’s Treasury Bills Auction, with the state fiscal agent receiving bids worth KSh 40.8billion, of which it accepted KSh 37 billion. This is a performance rate of 145.68% compared to 107% at the prior auction.
This is as investors whose bids were unsuccessful in the infrastructure bonds auction, which received overwhelming response from the market, sought for the next best investment alternative option.
According to CBK auction results, the 91-day Treasury Bill remained the most attractive debt instrument, registering a performance rate of 227.95%. The CBK received bids worth KSh 18.2 billion out of the KSh 8 billion of the 91-day bills offered, with the fiscal agent accepting KSh 16.4 billion.
Investors submitted bids worth KSh 8.9 billion out of the KSh 10 billion three-months Treasury Bills on offer, with the fiscal agent accepting KSh 7.1 billion, a performance rate of 89.9%.
CBK return to successful bidders
The 364-day Treasury Bills attracted bids worth KSh 13.6 billion out of the KSh 10 billion on offer, with the CBK accepting the entire amount, a performance rate of 135.6%.
The CBK paid successful bidders a return of 8.8%, 8.9% and 9.03% for the 91-day, 182-day and 364- day Treasury Bills, still an attractive investment for players in the fixed income market, given the prevailing inflation rate of 6.5%.
Meanwhile, the CBK has initiated a voluntary KSh15 billion debt switch auction—marking its third Treasury bill-to-bond switch on record and sixth overall switch in 2026.
According to a fixed-income market note from Standard Investment Bank(SIB), the latest Treasury Bills— Bonds switch auction signals a strategic pivot toward using liability management tools as active domestic debt management instruments.
The operation allows investors to convert three short-term Treasury bills maturing concurrently on 7th September 2026 alongside a 2027 paper (FXD1/2012/015, 11.00% coupon) into FXD4/2019/010, at 12.28% coupon bond maturing on 12th November 2029.
By targeting 22.4% of the KSh 67.07billion originally accepted across the three source bills—which initially saw massive investor demand, including an 820.68% performance rate on the 91-day paper—the National Treasury aims to push immediate refinancing pressure out by over three years.
With settlement set for 26th August 2026, just 12 days ahead of the concentrated bill maturity wall, the switch effectively extends government debt duration while replacing short-dated weighted average yields with a long-term fixed obligation.
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