Capital Markets

Investors offer Sh64.9bn for re-opened Treasury bonds


Central Bank of Kenya. FILE PHOTO | NMG

Investors have offered Sh64.92 billion on the two re-opened Treasury bonds, more than double the target, amid high liquidity in the market.

The Central Bank of Kenya targeted Sh30 billion on two 20-year papers first sold in 2019 and 2012 with 17.9 years and 11.4 years to maturity respectively.

The Treasury took Sh19.69 billion amid declined pressure to borrow as the government closes the current fiscal year and with expected flows from external lenders.

The sale of bond that runs until June 15, coincided with improved liquidity as the interbank dropped to 4.38 percent from 4.73 percent over the two weeks. The bonds hold coupon of 12.87 percent and 12 percent respectively.

The paper with a longer maturity profile — first sold in 2019 — held the highest amount of bids at Sh41.04 billion as the market picks cue in lengthening the maturity profile on the domestic debt by the government and reducing refinancing risks in the medium term.

The auction comes as the government expects disbursement of $750 million (Sh81 billion) from World Bank Group by end of the month and a facility from African Development Bank.

The Treasury also plans to issue the fourth Eurobond to the international final markets.

Large banks are among the top public debt holders amid cautious lending to the private sector that has pushed the lenders to the fixed income securities.

Banks hold 51.47 percent of the domestic debt.