The Central Bank of Kenya (CBK) has redeemed one of the year’s largest bond maturities, settling KSh 94.6 billion tied to the two-year FXD1/2023/002 issue.
- •The bond, carrying a 16.97% coupon, had been issued across nine tranches between August 2023 and July 2024, making it among the costliest papers in the government’s debt profile.
- •This redemption marked the first since May 2025, when CBK paid out nearly KSh 99.6 billion for the maturing five-year FXD1/2020/005.
- •Unlike the May bond, which carried a coupon of 11.67%, the August maturity hit the exchequer harder due to its elevated interest obligations, reflecting Kenya’s shift to higher-yield borrowing over the past two years.
Breakdown of FXD1/2023/002 Tranches
| Issue Date | Face Value (KSh Mn) | Coupon (%) |
|---|---|---|
| 08 Jul 2024 | 448.70 | 16.9723 |
| 24 Jun 2024 | 1,773.30 | 16.9723 |
| 10 Jun 2024 | 7,079.25 | 16.9723 |
| 22 Apr 2024 | 34,732.40 | 16.9723 |
| 16 Oct 2023 | 4,822.70 | 16.9723 |
| 02 Oct 2023 | 2,166.00 | 16.9723 |
| 18 Sep 2023 | 14,801.65 | 16.9723 |
| 28 Aug 2023 | 17,339.90 | 16.9723 |
| 21 Aug 2023 | 11,474.65 | 16.9723 |
| Total | 94,638.55 | 16.9723 |
Redemption Pressure and Coupon Outflows
The 18 August maturity, moreover, coincided with coupon payments on short-term Treasury bills, including the 91-day, 182-day, and 364-day papers. This compounded CBK’s cash outflows for the week and intensified liquidity management pressure at a time of rising fiscal financing needs.
In addition, the April 2024 tranche of the FXD1/2023/002 alone accounted for KSh 34.7 billion, over one-third of the total redemption. This concentration highlights the risks of clustering large borrowings in short-dated bonds during periods of market appetite for high yields.
Upcoming Maturities Easing
Looking ahead, CBK’s bond redemption calendar for the remainder of 2025 appears lighter.
- •The next maturity is the IFB1/2013/12, a 12-year paper issued in 2013, with KSh 15.2 billion due on 15 September 2025 at a coupon of 11%. December will see two additional maturities: the IFB1/2022/006 switch bond totaling KSh 29.7 billion on 1 December, and the FXD2/2010/015 and its 2011 reopening, totaling KSh 19.9 billion, maturing on 8 December at a 9% coupon.
| Maturity Date | Issue No | Principal (KSh Bn) | Coupon (%) |
| 15 Sep 2025 | IFB1/2013/12 | 15.2 | 11.0 |
| 01 Dec 2025 | IFB1/2022/006 | 29.7 | 13.215 |
| 08 Dec 2025 | FXD2/2010/015* | 19.9 | 9.0 |
(*Includes 2011 reopening)
Compared with May and August, these upcoming obligations are smaller in scale and carry lower coupon costs, suggesting temporary relief for the Treasury’s cash flow in the final quarter of the year.
