The Central Bank of Kenya (CBK) is making a strategic move to shore up Kenya’s fiscal reserves by floating Treasury Bonds worth Ksh. 40 billion in February 2024. The bonds, comprising 3-year, 5-year, and 10-year tenors, boast competitive coupon rates of 18.4%, 16.8%, and 16% respectively. This tap sale, scheduled between February 27th and March 20th, aims to attract diverse investors including commercial banks, non-bank financial institutions, and licensed stock brokers.
According to the CBK prospectus, the redemption dates for these bonds range from January 11th, 2027, for the 3-year treasury bond to March 13th, 2034, for the 10-year Treasury Bond. Placing agents for the bonds encompass a wide range of financial entities, with non-competitive bids capped at KSh 50 million per CSD Account per tenor.
To facilitate bids, investors must submit their proposals through CBK DhowCSD or Treasury Mobile Direct by specified deadlines. Notably, the auction date for the 5-year and 10-year treasury bonds is set for March 20th, 2024, signalling CBK’s meticulous planning to manage Kenya’s long-term fiscal health.
This initiative follows the success of previous issuances, with the debut 3-year treasury bond raising KSh 22.06 billion in January and the first reopening of the 5-year treasury bond garnering KSh 2.95 billion. The decision to fix the coupon rate for the 10-year bond at 16% demonstrates CBK’s strategic approach to gauging market appetite for long-term investment opportunities.
