The Central Bank of Kenya (CBK) has signaled continued investor confidence in long-term government securities, successfully raising Ksh 30.06 billion in its latest treasury bond auction. The results, released by the Directorate of Financial Markets, reveal a significant oversubscription as the state continues to manage its domestic borrowing requirements for the 2026 fiscal year.
The auction, which featured two 30-year instruments—the reopened SDB1/2011/030 (with 14.9 years remaining) and the brand-new FXD1/2026/030, aimed to net a modest Ksh 20 billion. However, the market responded with a total of Ksh 38.33 billion in bids, representing a robust performance rate of 191.66%.
The clear favorite among investors was the new 30-year paper (FXD1/2026/030), which alone attracted bids worth Ksh 31.28 billion. In contrast, the reopened bond saw more tempered interest, pulling in Ksh 7.05 billion.
While investors pushed for higher returns, the Central Bank maintained a disciplined stance on the weighted average rates for accepted bids:
- The New 30-Year Bond (FXD1/2026/030): Accepted at a weighted average rate of 13.75%, with a fixed coupon rate of 12.5%.
- The Reopened Bond (SDB1/2011/030): Accepted at a weighted average rate of 12.99%, carrying a coupon of 12.0%.
The government ultimately accepted Ksh 30.06 billion, effectively taking an additional Ksh 10 billion above its original target to bolster coffers. Of the accepted amount, roughly Ksh 6.75 billion came from non-competitive bids, typically representing retail investors and smaller institutional players.
The bid-to-cover ratio of 1.28 suggests that liquidity remains healthy in the local market, even for ultra-long-term durations. This successful capital raise provides the National Treasury with a significant liquidity cushion as it heads into the final quarter of the fiscal year.
The CBK has already confirmed that more opportunities are on the horizon. In a brief concluding statement, Robert Aloo, on behalf of the Director of Financial Markets, noted that the prospectus for the May 2026 treasury bond issues—including tenors and coupon rates—will be released in the coming weeks.
Auction Totals
- Target: Ksh 20.00 Billion
- Total Bids Received: Ksh 38.33 Billion
- Total Amount Accepted: Ksh 30.06 Billion
- Market Sentiment: Highly Bullish (191.66% Performance).