ECONOMYMARKETS

CBK Back to the Market Seeking KSh 60 Billion for Budget Support

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CBK headquarters in Nairobi
CBK HEADQUARTERS IN NAIROBI
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CBK (Central Bank of Kenya) has come back in the market with two reopened bonds (11.8 and 20 years to maturity) and two tap sales (8.7 and 17.1 years to maturity), barely days after investors settled the previous auction.

According to the prospectus from CBK, the 20 and 25 year Reopened Treasury Bonds have coupon rates of 13.2000% and 13.9240% respectively, subject to a withholding tax of 10% each with maturity dates of 01/03/2038 and 09/04/2046.

CBK to conduct the auction on 17th June 2026

CBK will conduct the period of sale between 09/06/2026 to 17/06/2026 with investors expected to submit their bids by 17/06/2026, at 10.00am. The auction date is 17/06/2026 and CBK settlement date set for 22/06/2026.
CBK is seeking KSh 60 billion for Budgetary Support, just as the 2026/27 budget has been tabled ushering in a new fiscal year. In this auction, non-competitive bids have a minimum of KSh 50,000.00, and a Maximum KSh 50,000,000.00 while competitive bid amount is KSh 2 million per CSD account per Tenor Payments.

All successful bidders should obtain the payment key and amount payable from the CBK DhowCSD Investor Portal/App under the transactions tab on Friday, 19/06/2026, for FXD1/2018/020 and FXD1/2021/025.
Defaulters may be suspended from subsequent investment in Government Securities. The Central Bank reserves the right to accept applications in full or part thereof or reject them in
Secondary trading in multiples of KSh 50,000.00 commence on Monday,22/06/2026 for FXD1/2018/020 and FXD1/2021/025.
The CBK will rediscount bonds as a last resort, at 3% above the prevailing market yield or coupon rate whichever is higher. Rediscount instructions should be sent from the CBK DhowCSD investor portal/App under the Instructions tab, select Create new and the Rediscount option.  The Bonds may be re-opened at a future date.

The bonds qualify for statutory liquidity ratio requirements for Commercial Banks and Non-Bank financial institutions as stipulated in the Banking Act CAP 488 of the laws of Kenya.
The bonds will be listed on the Nairobi Securities Exchange.

Investors can pledge Government Securities as collateral to access loans from regulated financial institutions.
A pledge not cancelled at least five days before the securities mature will result in securities automatically settling to the lender’s account. According to Analysts at Ketu Capital, those investors who participate in the tap sales, lock in the yield established in the previous auction. No competitive bidding.

If one goes for the reopened bonds, they gain the opportunity to bid competitively should one believe inflation and market conditions justify a higher return.

Written by
JACKSON OKOTH

Jackson Okoth writes for Business Today. He specializes in capital and money markets, energy sector, manufacturing, real estate, co-operatives sector, technology and agriculture. He can be reached on email at editor [at] businesstoday.co.ke

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