The Central Bank of Kenya(CBK) has invited investors to bid for KSh 60 Billion worth of Treasury Bonds. The proceeds will be used for budgetary support.
All bids must be submitted to any branch of CBK, Treasury Mobile Direct (TMD) or CBK internet Banking by 2.00 p.m on Tuesday, 21st July, 2020 with auction date set for 22nd July, 2020.
The CBK will rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate whichever is higher, upon written confirmation to do so from the Nairobi Securities Exchange(NSE).
The bonds will be listed on the NSE with secondary trading in multiples of KSh 50,000.00 to commence on Tuesday, 28th July, 2020.
Last month, the CBK floated a five-year and a 10-year Treasury Bond to raise a total of KSh 40 Billion, for budgetary support.
This is compared to the month of May when CBK entered the domestic money market, seeking funds through the sale of a KSh 50 Billion five-year fixed coupon Treasury bond.
Latest figures from CBK indicates that Government Domestic Debt, in terms of Treasury Bonds sold to investors, has risen from KSh 2.09 Trillion as at 31st March, 2020 to KSh 2.22 Trillion on 26th June, 2020.
The Government’s gross domestic debt now stands at KSh 3.178 Trillion, which includes Treasury Bills and Bonds, overdraft from CBK, and other domestic debt.
Treasury Bonds comprise 69.84% of this domestic debt while Treasury Bill account for 23.87% of the debt load.
Latest CBK data shows that banking institutions are the largest holders of Government debt, at 54.8% followed by pension funds( 29.1% ) insurance companies( 6.1%), parastatals( 5.7%) and other investors( 4.3%)