Kenya National Treasury Issues Two Bonds Seeking Ksh 30bn

The Central Bank of Kenya (CBK) which represents the exchequer’s primary debt auctioneer has listed two bonds- a re-opened 15 year issue and a new 25 year bond.

Kenya National Treasury building

Kenya National Treasury has re-opened its 15-year issue and a new 25-year bond seeking to raise Ksh 30 billion from the domestic market for budgetary support.

The 15-year bond (FXD2/2019/15)  has an estimated 13 years maturity is priced at 12.734 per cent (coupon rate) while the new bond FXD1/2021/25  will be market-determined

It is currently trading at a yield of 12.8 per cent in the secondary market, ‘as such, we recommend a bidding range of 12.5 per cent-12.7 per cent” according to Cytonn Investments analysts.

“Bonds with similar tenor are currently trading at a yield of 12.8 per cent – 13.4 cent in the secondary market and as such, we recommend a bidding range of between 12.9 per cent-13.3 per cent,” CytonnInvestments notes on the FXD1/2021/25.

The sale of the two bonds opened on 23 April is expected to close on May 4.

“We anticipate an oversubscription as investors have recently favored papers with longer tenors and subsequently a high acceptance rate as the government seeks to raise more funds to fund the recently approved supplementary budget,” the Analysts note.

The government is 32.1 per cent ahead of its domestic borrowing target, having borrowed Kshs 596.7 billion against a pro-rated target of Kshs 451.6 billion for the financial year 2021/2021.

April, Treasury raised Ksh.81.9 billion from the issuance of an infrastructure bond.