CBK(Central Bank of Kenya) invites bids for two long-term Treasury Bonds worth KSh 40 billion for budgetary support in the 2025/26 fiscal year which ends in the next two months.
According to a prospectus from CBK, the state fiscal agent is issuing a 15-year Treasury Bond, offering investors a return of 12.7560% on a paper which matures on 5th February 2035. CBK is also invited bids for a 25-year Treasury Bond, first sold in 2018 and has a coupon rate of 13.4OO0% with a maturity date of 25th May 2043.
CBK will be conducting the Auction on April 1st 2026 after the Sale period of between 23rd March 2026 to April 1st 2026, closes.
CBK AUCTIONS TO SUPPORT BUDGET SPENDING IN 2025/26 FISCAL YEAR
Data from CBK shows that the state fiscal agent has conducted several T-Bond Auctions since the 2025/26 financial year begun, to support the Government’s budgetary spending. For instance, in July 2025, the fiscal agent raised KSh 66.65 billion through a dual-tranche T-Bond auction, exceeding the KSh 50 billion target.
In August 2025, the CBK reopened infrastructure bonds targeting KSh 90 billion to finance several public projects. In September, CBK floated two Treasury Bonds worth KSh 50 billion, re-opened two papers in October targeting KSh 40 billion, another auction in November targeting KSh 40 billion and KSh 40 billion in December through two-reopened T-Bonds.
CBK is also conducting the third Treasury Bond switch auction designed to shift KSh 20 billion in liabilities from a nearing-maturity Treasury bond to a longer-dated instrument.
This voluntary transaction aims to optimize the national debt profile by shifting holdings from a 10-year Treasury Bond to a medium-term 15-year instrument that was first sold in 2018.
Holders of the 10-year T-Bond with a coupon rate of 15.0390% are being invited submit bids that will migrate them from this instrument which matures on August 17th 2026, to a 15-year Treasury Bond, which has a much lower return of 12.6500%.
The sale period takes place between March 23rd 2026 and April 13, 2026 with deadline for submission of bids as well as the auction taking place on the same day, April 13th 2026.
The 15-year paper offers investors a significantly longer horizon, with 7.1 years remaining to maturity. It carries a coupon rate of 12.6500% and matures on May 9, 2033. The paper attracts an accrued interest of KSh 5.1782 per KSh 100.
The CBK has undertaken at least two switch bond auctions this financial year. The first switch targeted KSh 20 billion, allowing holders of a 10 –year bond to maturing in August migrate to a 15-year bond. The second switch auction happened this month, targeting 15 billion with holders of the 5-year instrument maturing in November 2026.
The CBK bond switch strategy involves exchanging outstanding bonds nearing maturity for longer-term papers so as to manage refinancing risks and optimize the Government’s debt profile.
In its first switch auction in the 2025/26 fiscal year, which is part of the Government’s liability management operations that seek to use buybacks and switches to actively manage maturity risk, reduce borrowing costs, and smooth the redemption profile of domestic debt.
In January this year, CBK picked on a 10-year T-Bond for two liability management operations (October 2025 and January 2026).
Market Analysts expect this latest switch bond to provide investors in the fixed income market with an opportunity to extend the duration of their portfolios. This is especially so for fund managers who are keen on managing their cashflows, locking in the comparatively attractive coupon rates amid current rate declines.
Furthermore, the switch help investors address potential reinvestment risk if yields in the market fall even further, should any paper on offer be held till maturity.
National Treasury aims to raise some KSh635Billion in domestic borrowing to support the 2025/26 budget. The strong demand for long term treasury bonds is seen as a signal of huge investor confidence in the Kenyan economy.
With the yield on government paper on a decline, the CBK maintains a huge appetite for cheaper funds, to repay maturing debt as well as finance the 2025/26 budget, with two months left for the fiscal year to end.
ALSO READ: CBK Accepts Bids Worth KSh 18.4 Bn At Bond Switch Auction
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