CBK (Central Bank of Kenya), the Government’s fiscal agent is seeking for KSh50billion from the domestic money market for budget support, the third time in is doing so in the month of September. In the last monetary actions this month, CBK has come in twice to seek for KSh60billion for budget support on both occasions, through re-opened Treasury Bonds.
This time round, CBK is targeting KSh 50billion for budget support through another reopening of two familiar Treasury bonds, both already reopened several times in 2026.
CBK Prospectus
According to its latest prospectus, the CBK has re-opened a 15-year Treasury Bond, first sold in 2017, which is paying a 12.34% coupon and has 7.8 years remaining to maturity on 10th July 2034.
CBK has also re-opened a 20-year Treasury Bond, first sold in 2019, paying a 12.873% coupon and has 12.5 years remaining to maturity on 21st March 2039.
The sale period for the two re-opened instruments is between 24th and 30th September 2026. Bids close at 10am on 30th September, with the auction held the same day and Settlement on 5th October, 2026.
At the same time, the CBK has issued a prospectus inviting holders of the 3-year Treasury Bond, sold in 2024 with 0.3 years to maturity as well as a 15-year Treasury Bond sold in 2013 with 1.5 years to maturity to switch to a 15-year Treasury Bond, first sold in 2018 and has 6.6 years to maturity and offers a coupon of 12.65%.
The three-year Treasury Bond has a higher coupon of 18.3854% and matures on 11th January 2027 and attracts a withholding tax of 15%. The switch bond matures on 9th May 2033 and has a lower Witholding tax of 10%.
The period of sale for this switch bond auction is from 24th September to 5th October 2026, which is also the Auction date while the settlement date is 7th October 2026.
At the prior Treasury Bonds auction, the CBK did an auction for two reopened, 20 and 30-year Treasury Bonds carrying coupon rates of 12.9% and 12.5%, respectively.
Investor demand was strong, pushing total bids to KSh 81Billion against an initial offer of KSh 60Billion. This resulted in an overall oversubscription rate of 136%. Out of the bids received, the government accepted KSh 50billion, achieving a 61% acceptance rate.
A report from Standard Investment Bank says that with the government expected to lean heavily on the domestic market to plug its budget deficits, borrowing demands will likely stay high, keeping consistent upward pressure on local yields over the medium term despite high liquidity conditions.
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