CBK (Central Bank of Kenya) accepted bids worth KSh 63.3 billion at the Treasury Bonds Auction held this Wednesday on 22nd July 2026, a 214.82% oversubscription. This is out of the KSh 40 billion that the Government’s fiscal agent was seeking for 2026/27 budgetary support.
At the Auction, investors piled up for the 25-year re-opened Treasury Bond, which was offering an attractive coupon rate of 14.49%. CBK received bids worth KSh 61.9 billon out of which successful bids amounted to KSh 51. Billion.
The 20-year re-opened Treasury Bond, first sold in 2019, attracted bids worth KSh 23.9 billion on a coupon rate of 12.87% with the state fiscal agent accepting KSh 12.2 billion while rejecting the other more expensive bids. This debt instrument will mature on March 21st 2039 while the 25-year re-opened bond has 21.4 years to maturity due on 23rd September 2047.
According to analysts at Standard Investment Bank(SIB), investor aggressiveness in the CBK held Treasury Bonds primary market is expected to persist. With headline inflation at 6.7% and the ongoing Middle East geopolitical tensions threatening global energy prices, domestic inflationary pressures will likely stay elevated.
Furthermore, costly Government interventions such as fuel tax reliefs and subsidies will likely strain fiscal balances, forcing the state to rely heavily on domestic debt, driving yields higher in the coming months.
CBKÂ Bond Switch Auction attracts less appetite
This is demonstrated at the recent bond switch auction, which attracted moderate investor appetite. The uptake of CBK’s bond switch that saw KSh 8.16 billion in bids received against the KSh 10billion target, with KSh 7.95billion accepted and KSh 7.91billion switched from the 5-year Treasury Bond first sold in 2021 into the 20-year Treasury Bond due on 1st November 2032.
The 20-year Treasury bond had a weighted average yield of 12.8076%, extending maturities and easing treasury’s debt refinancing pressures.
Total domestic debt maturities in July 2026 are at KSh 152 billion down from KSh 189 billion in June 2026.
The Government has adopted an aggressive external financing and debt-management strategy aimed at easing debt repayment pressures by extending maturities, and diversifying its funding sources.
The Treasury is considering issuing a new dollar bond to finance the buyback of up to US$ 500million of existing Eurobonds in 2026/27 fiscal year, a transaction that would mark Kenya’s fourth external debt buyback in two years and continue the shift away from large, concentrated maturity obligations.
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