CBK reopens long-term treasury bonds to raise Ksh. 40 Billion

The Central Bank of Kenya (CBK) has announced the 8th Treasury Bond reopening for the Fiscal Year 2025/26, seeking to raise Ksh. 40 billion in a dual-tranche auction.

This latest issuance taps into longer-dated securities, continuing the government’s strategy to fund the budget and lock in financing ahead of potential market risks. The auction aims to capitalize on the sustained, robust demand from institutional investors like pension and insurance funds who seek long-duration assets.

The auction, which closes for bids on November 19, re-opens two existing infrastructure bonds:

• Settlement Date: November 24.
• Minimum Bid: Ksh. 2 million (Competitive Bids).
• Non-Competitive Bids: Up to Ksh. 50 million are allowed.

This reopening is part of an aggressive domestic borrowing strategy adopted in the first half of the fiscal year.

• Year-to-Date Borrowing: Treasury has already raised approximately Ksh. 543 billion through bond sales, significantly exceeding the typical pace.
• Mitigating Risk: This “front-loading” strategy allows the government to secure financing early, reducing “rollover risk”—the exposure to refinancing maturing debt at potentially higher interest rates later in the year.

The previous auction on November 10 was heavily oversubscribed, raising KSh 52.83 billion against a target of KSh 40 billion.