Kenyan 10-year T-Bond, T-Bills Undersubscribed, Banks Keep Off

Kenya’s 2 and 15-year Treasury Bonds Raise Ksh 32bn

Kenyan 10-year Treasury bond (FXD 4/2019/10) was massively undersubscribed in the tap sale recording a performance of 37.5 percent.

The Central Bank of Kenya (CBK) said: “It received bids totalling KSh 8.1 billion against an advertised amount of KSh 21.7 billion.”

The sale period of the bond was between Nov. 26 to Nov. 28 on a first-come-first-served basis.

During the initial auction, the bond was undersubscribed, with the subscription rate of 76.8%, on the back of an expected increase in private sector credit with banks now looking to lend to the private sector, due to the interest rate cap repeal.

Kenyan 10-year T-Bond, T-Bills Undersubscribed, Banks Keep Off

Treasury bills

Treasury bills were also undersubscribed as commercial banks kept off the debt market following the repeal of law capping interest rates.

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The CBK reported that they received bids totaling KSh 8.4 billion against an advertised amount of KSh24.0 billion, representing a performance of 34.8 percent.

“Interest rates on the 91-day Treasury bill rose marginally, while those of the 182-day and 364-day Treasury bills declined.”

The 91-day paper worth 40 million dollars attracted a subscription of 23 percent, raising 9.2 million U.S. dollars while the other two papers valued at 100 million U.S. dollars each raised 10 million U.S. dollars for the 182-day bill and 63 million U.S. dollars for the 364-day bill, the apex bank’s auction data showed on Friday.