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.
Results for Re-Opened Twenty-Year Treasury Bonds Issue Nos. FXD1/2019/20 & FXD1/2012/20 dated 21 June 2021 pic.twitter.com/t1XyF6i5n8
— Central Bank of Kenya (@CBKKenya) June 16, 2021
“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.