The Central Bank of Kenya(CBK) is seeking to raise KSh 21 billion from the market, just days after rejecting numerous bids in a similar tap sale. The state fiscal agent will be floating a 2-year and a 5-year fixed coupon treasury bonds, whose period of sale is between 22nd August 2023 and 24th August 2023.
CBK offer to investors
The average yield on the 2-year treasury bond is 16.9723% while that on the 5-year debt instrument is 17.9538%. The Coupon rate for the two fixed coupon t-bonds will be 16.9723% and 16.8440% respectively.
At an earlier Treasury Bonds tap sale last week, the monetary authority accepted bids worth KSh 19.1 Billion from the tap sale of a new 2-year and re-opened 5-year Treasury Bonds, all worth KSh 40 billion.
Despite receiving bids worth KSh 53 billion, an oversubscription of 132.5%, the CBK rejected most of these bids.
The Government fiscal agent offered a coupon rate of 16.9% and 16.9% for the two-year and five-year treasury bonds.
In the H2 2023 Outlook, analysts expect investors to continue demanding a premium by placing aggressive bids in the T-Bonds Primary market. Coupon rates could touch a near 20% as CBK issues longer tenure debt instruments.
Investors who missed out on the primary issuance have been driving demand for these fixed-income debt instruments in the secondary market more so the infrastructure bonds. This trend is expected to continue in the second half of this year on the back of the huge rejection of bids by CBK.
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