CBK (Central Bank of Kenya) has invited bids for a re-opened 25-year and 30-year Treasury Bonds, the purpose of the December Auction being to raise KSh 40 billion for Budgetary support.
The state fiscal agent is offering investors an attractive Coupon Rate of 12% for the 30-year Treasury Bond that was first sold in 2021, with a maturity date of 21st January 2041.
CBK is also offering a Coupon Rate of 13.92% for the 25-year fixed income Government Debt Security that matures on 9th April 2046.
The sale of these two debt instruments runs from November 27th to December 3rd 2025 when the auction takes place. Secondary listing and trading of the two bonds at the Nairobi Securities Exchange(NSE) will be on December 8th 2025.
CBK prospectus mentions that the fiscal agent will rediscount the bonds as a last resort, at 3% above the prevailing market yield or coupon rate whichever is higher, upon written instructions from investors.
CBK Auctions in October-November for Budget Support
This month, CBK came twice to the domestic debt market, seeking for a cumulative total of KSh 80 billion through the auction of 4 long-term reopened Treasury Bonds.
In the first Auction of 5th November 2025, CBK raised KSh 52.8 billion against received bids worth KSh 96.2 billion. At the second November Auction, the state fiscal agent accepted bids worth KSh 54.8 Billion. This brings total borrowings by National Treasury, to finance the 2025/26 Budget, in November to KSh 107.6 Billion.
In October 2025, National Treasury borrowed KSh 85.3 billion, through the CBK Auction of two long term Treasury Bonds that saw investors submit an overwhelming KSh 118.8 Billion against two papers that were worth KSh 50 Billion.
Data from the CBK Auctions show that the coupon rates are on a fall, as investors rush in to lock the gains. For instance, while the 25-year Government paper was attracting coupon rates in the region of 14% in October and November, this return has since dropped to 13.9% for the December paper with the same tenor.
Last week, the fiscal agent successfully bought back KSh 20.01billion, redeeming 26.2% of the outstanding amount for a 3-Yr Treasury Bond that was first sold in 2023.
According to a weekly report by Standard Investment Bank(SIB) this auction was slightly oversubscribed, with the offer a subscription of 114.32%.
The weighted average interest rates of accepted bids came in at 7.80%, close to the 182-day T-Bill (7.79% as of 18th November 2025). The Weighted Average Rate is what the CBK agreed to pay on the re-opened Treasury Bonds.
This is usually viewed against Market Weighted Average; what bidders are willing to lend to the CBK. The difference between these rates represents the more expensive bids rejected — investors demanding higher returns than the government is willing to pay. In last week’s buy back a significant amount of KSh 14.2billon worth of bids was rejected, which suggests either a cautious approach to cash flow management or rejection of aggressive bids.
This is particularly relevant in light of the recent news about the freezing of the KSh 96.6bn budget support loan from the World Bank over efforts for the government to manage the budget deficit.
Nonetheless, the buy-back reiterates the National Treasury’s liquidity management strategy that focuses on managing maturity risk and smoothing the redemption profile of domestic debt.
Kenya’s Budget deficit for the 2025/26 financial year is including grants is projected at KSh 923.2 billion, down from KSh 997.5 billion in 2024/25 fiscal year.
The Kenya Kwanza Administration has planned to bridge this gap through external borrowing of KSh 287.7 billion domestic borrowing of KSh 635.5 billion.
ALSO READ: CBK Borrows Another KSh54.8Bn for Budget Spending
Leave a comment