CBK indicated it had received bids worth Sh27.04 billion against an offer of Sh40 billion, a performance rate of 67.61 per cent, and accepted Sh7.85 billion.
Competitive bids were Sh3.21 billion while non-competitive bids stood at Sh4.63 billion.
The average rate of accepted bids went down from the previous auction on the 15-year in May by 0.33 per cent (13.078 per cent to 12.746 per cent).
The uptake of October 15-year Treasury bond tenor improved on the previous similar paper issued in May, even as the overall performance fell off the target amount.
Central Bank of Kenya (CBK) indicated it had received bids worth Sh27.04 billion against an offer of Sh40 billion, a performance rate of 67.61 per cent, and accepted Sh7.85 billion.
Competitive bids were Sh3.21 billion while non-competitive bids stood at Sh4.63 billion.
The average rate of accepted bids went down from the previous auction on the 15-year in May by 0.33 per cent (13.078 per cent to 12.746 per cent).
“This improved performance is attributed to the attractive coupon rate of the bond and investor quest for high yields in the market,” said Churchill Ogutu, a macro-economic and fixed-income analyst at Genghis Capital.
Analysts also viewed the uptake as having been propped up by investors adopting the “riding the yield curve” strategy with the purchase of longer-maturity for their portfolios. The rejection of close to Sh20 billion at the auction is sending a strong signal to the market that the CBK is deliberate against aggressive bids.
The market weighted average rate of 12.85 per cent was last seen two months ago on the yield curve, with 15-year yields easing off since.
“Barring a tap sale, we expect the rejected cash to spur trading of shorter maturity bonds at the bourse,” analysts said.
They still expect CBK to continue its longer-tenor bond issuance in line with its debt management strategy in the fiscal year to mitigate short-term refinancing risks.
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