The Central Bank of Kenya (CBK) recent auction for two reopened infrastructure bonds, IFB1/2010/15 and IFB1/2022/19, was a notable success, with the bank receiving overwhelming bids from investors. The auction, held on August 14, 2025, saw a total of Ksh. 323.43 billion in bids, significantly exceeding the target of Ksh. 90 billion. This strong demand is a clear indicator of high investor confidence in government debt instruments.
The auction successfully accepted Ksh. 95.01 billion, surpassing the initial offer amount. This was a result of the high number of bids received, leading to a robust Bid-to-Cover Ratio of 3.60 for the combined issue. This ratio, which compares the total bids to the amount offered, indicates that there was ample demand to cover the government’s borrowing needs. The high subscription rate also reflects investor appetite for fixed-income assets.
1. IFB1/2010/15: This bond, with a fifteen-year tenor, attracted bids worth Kshs 215.94 billion. The government accepted Ksh. 50.66 billion at a weighted average rate of 13.1118%.
2. IFB1/2022/19: The nineteen-year bond received bids totaling Kshs 107.49 billion, with the Central Bank accepting Kshs 44.36 billion at a weighted average rate of 14.1207%.
The Coupon Rates for the two bonds are 12.50% and 12.965% respectively. The accepted rates reflect the market’s current expectations and pricing for long-term government debt.
Following the success of this auction, the Central Bank of Kenya announced a new Treasury Bond(s) issue for September 2025. The specific details regarding the tenor, amount, and coupon rates will be released in the prospectus before the issue date. This signals a continued effort by the government to raise funds for its infrastructural and development projects through the domestic market. The strong performance of the recent auction provides a positive outlook for the upcoming issue.