The government had floated a Sh50 billion bond consisting of reopenings of a 10-year bond first sold in 2019 and a 20-year paper whose first sale was in 2018.
The Central Bank of Kenya (CBK) said that it received bids worth a total of Sh48.7 billion on the two papers, leaving just Sh400 million on the table.
The Treasury has raised Sh48.3 billion from its March bond sale, taking up virtually all them oney on offer from investors as it races to close the domestic borrowing target for the current fiscal year.
The government had floated a Sh50 billion bond consisting of reopenings of a 10-year bond first sold in 2019 and a 20-year paper whose first sale was in 2018.
The Central Bank of Kenya (CBK) said that it received bids worth a total of Sh48.7 billion on the two papers, leaving just Sh400 million on the table.
The longer dated paper raised Sh32.8 billion as investors went for its higher yield, where it is paying an average of 13.44 percent.
“The longer bond received more bids as a result of higher yields on the long end of the yield curve as well as an oversupply of medium-term bonds that have left little room for capital appreciation,” said analysts at Sterling Capital in a note on the bond result.
“We anticipate the CBK to issue a tap sale on the issue as has been the trend recently.”
The bulk of the funds raised in the bond will be going towards the new borrowing column at the exchequer, with no maturities on the bonds register this month.
Domestic debt service for March stands at Sh126 billion, down from Sh135.8 billion in February. Treasury bill maturities account for Sh108.3 billion, while Sh17.7 billion goes towards interest payments.
“The decline in domestic debt service this month implies that a smaller proportion of funds raised in auctions will be directed towards debt redemptions rather than new borrowing compared to February 2021,” said Sterling.
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