Capital Markets

State raises Sh60 billion in October T-bonds sale

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Central Bank of Kenya (CBK). FILE PHOTO | NMG

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Summary

  • The Treasury had floated a two-tranche paper, reopening 20-year and 25-year bonds first sold in 2011 and 2018 respectively, which have got 10.6 and 22.7 years to maturity.
  • The Central Bank of Kenya (CBK), which is the government’s fiscal agent, said that investors bid a total of Sh69.14 billion in the issue, with the higher share (Sh45.98 billion) going to the 25-year paper.
  • New borrowing from the issue however amounted to Sh26.64 billion, with Sh33.39 billion going towards settling or rolling over maturing bonds.

The government raised Sh60.03 billion in October’s Treasury bond sale, exceeding its target by Sh10 billion as investors showed appetite for the longer dated paper that was offering higher yields.

The Treasury had floated a two-tranche paper, reopening 20-year and 25-year bonds first sold in 2011 and 2018 respectively, which have got 10.6 and 22.7 years to maturity.

The Central Bank of Kenya (CBK), which is the government’s fiscal agent, said that investors bid a total of Sh69.14 billion in the issue, with the higher share (Sh45.98 billion) going to the 25-year paper.

New borrowing from the issue however amounted to Sh26.64 billion, with Sh33.39 billion going towards settling or rolling over maturing bonds.

The bond, whose sale concluded on Tuesday, coincided with a period of rising liquidity in the market, which helped the uptake.

The weighted average interest on accepted bids for the 20-year paper stood at 11.99 percent, and for the 25-year paper 13.49 percent.

The primary bonds market has been seeing good demand since the beginning of the fiscal year in July, given its double digit interest returns while other investment classes such as equities and property are mostly in the red.

Since July, the Treasury has raised a net of Sh291.32 billion from bond issuances, having taken up Sh324.71 billion against maturities of Sh33.39 billion.