The Central Bank of Kenya (CBK) has announced a Sh50 billion sale of reopened 15-year and 20-year Treasury bonds as the government seeks financing for budgetary support.
The bonds, issued through CBK in its capacity as fiscal agent for the Republic of Kenya, comprise FXD3/2019/015, a 15-year bond, and FXD1/2019/020, a 20-year bond.
The sale opened on September 24, 2026, and will run until September 30, with investors required to submit their bids by 10 am on September 30.
The auction will be conducted through a multi-price bid auction, with the government targeting a combined Sh50 billion from the two securities.
The FXD3/2019/015 bond has approximately 7.8 years to maturity, carries a coupon rate of 12.34%, and is scheduled to mature on July 10, 2034.
The FXD1/2019/020 bond has about 12.5 years to maturity, carries a coupon rate of 12.873%, and will mature on March 21, 2039.
Both bonds attract a 10% withholding tax.
According to the CBK prospectus, the funds raised through the reopening will be used for budgetary support, making the auction part of the government's domestic borrowing programme.
Investors with active DhowCSD accounts are eligible to participate in the auction.
For non-competitive bids, investors can submit a minimum of Sh50,000 and a maximum of Sh50 million. Competitive bids must have a minimum value of Sh2 million per CSD account per tenor.
CBK says successful investors will receive details of the payment key and amount payable through the DhowCSD Investor Portal or App under the Transactions tab on October 2.
“Defaulters may be suspended from subsequent investment in Government Securities,” the prospectus stated.
The auction is scheduled for October 5, 2026, which is also the settlement date.
The bonds will subsequently be available for secondary trading in multiples of Sh50,000 from October 5.
The reopening gives investors an opportunity to purchase additional units of existing government securities rather than investing in a newly issued bond.
The two securities have different maturity profiles, allowing investors to select exposure based on the remaining term of the respective bonds.
The CBK pricing tables show that for FXD3/2019/015, a yield of 12.375% corresponds to a clean price of 99.7830, while a 13% yield corresponds to a clean price of 96.7793.
For the longer-dated FXD1/2019/020, a yield of 12.875% corresponds to a clean price of 99.9877, while a 13% yield corresponds to a clean price of 99.2254.
The FXD3/2019/015 bond attracts accrued interest of Sh2.6104 per Sh100, while FXD1/2019/020 has accrued interest of zero at the time of the offer.
CBK says withholding tax is calculated on the clean price.
“The Central Bank reserves the right to accept applications in full or part thereof or reject them in total without giving any reason.”
The bonds may be reopened again in future and qualify for statutory liquidity ratio requirements for commercial banks and non-bank financial institutions under the Banking Act.
They will also be listed on the Nairobi Securities Exchange, providing investors with a secondary market through which the securities can be traded.
CBK will rediscount the bonds as a last resort at 3 percentage points above the prevailing market yield or coupon rate, whichever is higher.