Central Bank of Kenya(CBK) is inviting bids for two bond auctions, worth KSh 30 Billion each, that will be conducted in January 2022.
The purpose of the T-bonds sale is for the state to raise some KSh 60 Billion for budgetary support.
The State’s fiscal agent said in the latest prospectus that the First Auction will take place on January 4th 2022, for a re-opened five-year fixed coupon Treasury bond first sold in 2020.
The Second Auction consists of two re-opened 10-year and 20-year T-Bonds that were first sold in 2018 and August 2021 respectively, whose sale will run until January 18th 2022.
These bonds will have 3.4 years, 7 years and 19.7 years maturity respectively, offering coupon rates of 11.67 per cent, 12.5 per cent and 13.44 per cent.
The auction date for the two offers is 5th January for the re-opened 5-year T-Bonds while 19th January 2022 is the auction date for the re-opened 10-year and 20-year Treasury Bonds.
Investors should obtain details of amounts payable for successful bids from CBK on January 6th 2022 for the 5-year re-opened fixed coupon T-Bonds and 20th January 2022 for the 10-year and 20-year T-Bonds.
The CBK will rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher, upon approval from NSE.
Secondary trading of these bonds in multiples of KSh 50,000 will commence on 11th January 2022 and January 25th 2022.
Sale of the re-opened 5-year T-Bonds began on December 20th, 2021 and ends on 4th January 2022 while that of the two other T-Bonds, which also began on December 20th, 2021 ends on 18th January 2022.
The government has set a net borrowing target of KSh616.80 billion from the domestic market in the current fiscal year ending June 2022 and had borrowed KSh311.17 billion as of December 10th 2021.
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