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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.

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.

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