Treasury Seeks Ksh.60 Billion From January Bonds

The National Treasury aims to raise Ksh.60 billion from the sale of bonds next month.

On Monday, the Central Bank of Kenya (CBK) issued a prospectus of three re-opened; five year, ten year and twenty year Treasury bonds (T-bonds) whose sale will be undertaken in two auctions.

The value of the three re-opened bonds is set at Ksh.30 billion per auction while the three papers have a tenure of 3.4, 7 and 19.7 years respectively.

Investor bids are largely expected to fall under the shorter end of the tenure stick as takers seek to shield themselves from longevity risks.

Meanwhile, the CBK will seek to keep yields on investor bids within the paper’s coupon rates of 11.667, 12.502 and 13.444 per cent respectively.

All three bonds are expected to remain open for bidding until January 4 for the 3.4-year paper and January 18 for the remaining pair of T-bonds.

The government will back itself to sustain high investor interest on the debt instruments having already done so in the majority of 2021.

December Treasury bonds for instance marked bids of Ksh.41.2 billion against a target of Ksh.40 billion.

Even so, the CBK is likely to face aggressive bids in the three auctions as investors seek to push yields above the pre-advertised coupon rates on the papers.