Kenya Raises KSh 50.19 Bn in Oversubscribed April Bond Reopening

The Central Bank of Kenya raised KSh 50.19 Billion in its April reopening of two fixed-coupon Treasury bonds, exceeding the KSh 40Billion target by 25% as both instruments priced above par in a declining yield environment.

• •Combined bids reached KSh 74.89Billion, a 187% performance rate and 1.49x bid-to-cover, according to results released by the Central Bank on 1 April.
• •The reopening covered the FXD1/2020/015 bond maturing in 2035 and the FXD1/2018/025 bond due in 2043, both originally issued as long-tenor fixed-rate securities.
• •CBK has signaled further bond issuance in May 2026, with details on tenor, amounts and coupon rates to be provided in the prospectus ahead of the issue date.

Demand was more evenly distributed than in March, when the longer paper attracted a 4.15x bid-to-cover ratio. The 25-year bond still drew stronger relative demand at 2.44x coverage, but CBK was selective, accepting only 41% of bids received on that tenor. The 15-year accounted for 73% of total accepted volume.

Both bonds priced above par at accepted yields with the 15-year clearing at 12.19%, roughly 57 basis points below its 12.756% coupon, translating to a price of 104.72. The 25-year cleared at 12.99%, about 41 basis points below its 13.400% coupon, pricing at 106.89. The gap between market weighted average rates and accepted rates on the 25-year (13.18% versus 12.99%) indicates CBK rejected higher-yield bids to contain borrowing costs.

Non-competitive bids totaled KSh 9.48Billion, or 19% of accepted volume, reflecting continued retail and smaller institutional participation. The entire KSh 50.19Billion constitutes net new borrowing, with no redemptions against the issue.

The April results bring the FY2025/26 reopening programme to 14 auctions since July 2025.

Net borrowing of KSh 737.69Billion now stands at 83% of the revised FY2025/26 domestic borrowing target of KSh 885.9Billion, set in the Supplementary Estimates tabled in March. That leaves roughly KSh 148 Billion of headroom across the remaining May and June auctions, not counting T-bill net issuance or the KSh 20Billion switch auction scheduled for 13 April.

The above-par pricing across both tenors reflects a broader trend. With CBK having cut the policy rate ten consecutive times to 8.75%, investors are willing to pay a premium to lock in coupons of 12.76% and 13.40% on long-dated government paper. That dynamic has allowed Treasury to consistently borrow above target while keeping accepted yields below coupon rates throughout the fiscal year.