The Central Bank of Kenya(CBK) has raised KSh 27.6 billion from the sale of the 15-year treasury bonds which had targeted to raise KSh 30 billion.
The government’s fiscal agent received bids of KSh32.5 billion on the 15-year security, an oversubscription of 108.49% and rejected KSh4.9 billion worth of bids received
The long-term bond was sold at an average fixed interest rate of 13.94 percent and which was set by the market.
Out of the amount accepted, competitive bids were worth KSh 15.5 billion while non-competitive bids amounted to KSh 12.1 billion.
In the first Treasury Bonds sale in April, the CBK accepted KSh 33.1 Billion. At this auction, it received bids worth KSh 34 billion out of the KSh 40 billion offered, an undersubscription of 85.11%.
In total, CBK raised KSh 60.7 Billion from the two T-Bonds sale in April 2022.
The sale period for these 15-year T-Bonds began on 24th March 2022 and ended on 19th April 2022, and an auction set for 20th April 2022.
The CBK offered successful bidders a coupon rate of 13. 942% while the purpose of the funds raised is new borrowings by Treasury.
The CBK said specific features of the forthcoming Treasury Bonds to be offered for sale in May, including amounts, coupon rates and issue terms will be provided in the prospectus before the issue date.
T-Bonds offer investors interest payments every six months until the debt instrument reaches maturity and is usually a more secure medium to long term investment option.
The state fiscal agent usually conducts monthly t-bonds auctions and offers a variety of bonds throughout the year.
Most t-bonds have a fixed rate of return, ensuring that the market-determined interest rate at the auction remains fixed until the end of the bond’s life.
Thus t-bonds provide investors with a steady and long term source of income, including the more attractive tax-exempt infrastructure bonds.