Kenya Treasury Accepts Ksh 19.7Bn from 20-year Bond

• The Central Bank of Kenya (CBK) re-opened two 20-year bonds namely, FXD1/2012/20 ( 17.9 years to maturity) and FXD1/2019/20 (11.4 years to maturity) to raise KES.30Bn.

The Central Bank of Kenya (CBK) raised Ksh 19.7 billion from the sale of its re-opened two 20-year bonds on Wednesday on behalf of the National Treasury.

The bonds, FXD1/2012/20  with 17.9 years to maturity and FXD1/2019/20  with 11.4 years to maturity were meant to raise Ksh 30 billion.

During the auction, the bonds received bids worth Ksh.64.9 billion, a 216.4 per cent subscription rate. The CBK, however, only accepted bids worth Ksh 19.7 billion with Ksh 6.3 billion from FXD1/2012/20 and Ksh 13.4Bn from FXD1/2019/20.

“We attribute the oversubscription to the low target amount (Ksh 30 billion) and high market liquidity prompted by a low-interest-rate environment,” Analysts from Sterling Capital said in an emailed note. 

“We predict a continued increase in yields on long term papers in 2021 as the CBK continues to encourage bids on these tenors as a means of lengthening the Average Term to Maturity (ATM) of public debt,” they added.

Kenya’s Fiscal Deficit at 7.5% of GDP in 2021-22: Treasury