The Central Bank of Kenya(CBK) received bids worth KSh 16.8 Billion from the advertised amount of KSh 24 Billion at the Weekly Treasury Bills Auction held yesterday.
Out of these, the CBK accepted bids worth KSh 14.9 Billion, an undersubscription rate of 70%.
CBK T-Bills auction undersubscribed
While the Weekly T-Bills Auction has been underperforming for more than three consecutive weeks, investors have shown preference to the longer term, 0ne year Treasury Bill, which continues to be oversubscribed.
At this auction, the 364-day Treasury Bil offered an average interest rate of 8.716% compared to 8.623% at the last auction.
The one-year T-Bill received bids worth KSh 14.2 Billion out of the KSh 10 Billion advertised amount with bids accepted standing at KSh 12.4 Billion.
Bids worth KSh 489.41 Million was accepted out of the KSh 4 Billion offered at the auction, an undersubscription of 12.62%.Average interest rates provided on this three-month T-Bill also declined to 6.873% from 6.897% offered at the previous auction.
The 182-day Treasury Bill also saw its return edge up slightly to 7.594% at this auction compared to 7.578% prior.
Next Auction
The next Treasury Bills Auction will be on 11th February 2021 where the Treasury is seeking a total of KSh 40 Billion for loan redemptions and KSh 16.1 Billion in new borrowings/redemptions.
Results from this auction will be announced on 12th February, 2021.
February Treasury Bonds sale
The re-opened Treasury Bonds sale, dated 8th February 2021, attracted bids totalling KSh 41.9 Billion out of the KSh 50 Billion offered at issue.
The CBK accepted bids worth KSh 32.1 Billion, an undersubscription of 83.72%.
The 15-year Treasury Bond received bids worth KSh 13.6 Billion out of which KSh 9.4 Billion was accepted, a performance of 27.11%.
The 20-year Treasury Bond, whose due date is 01/11/2032 received bids worth KSh 28.3 Billion with amounts accepted at KSh 22.7 Billion.
This is a performance rate of 56.6%.
Coupon rate
The 15-year Treasury Bond had a coupon rate of 11.250% while the 20-year attracted a coupon rate of 12%.
The CBK said that details of its March 2021 Treasury Bond(s) issue(s), including tenor, amounts, coupon rate and issue terms would be provided in the prospectus before the issue date.
Proceeds from the February 2021 Treasury Bonds issues with be used for loan redemptions amounting to KSh 7,868.37 Million.
National Treasury will also use KSh 24,253.63 Million as new borrowings/ net repayments.
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