CBK Seeks KSh 40bn in Feb T-Bonds Tap Sale

The Central Bank of Kenya (CBK) has floated Treasury Bonds worth KSh 40 billion for budgetary support during February 2024.

• The 3-year, 5–year and 10-year Treasury bonds have a coupon rate of 18.4%, 16.8%, and 16% respectively, and will be on sale between 27^th February 2024 and 20^th March 2024.
• The CBK prospectus shows that the value date for the tap sale is 23^rd March 2024.
• The redemption dates for the 3-year treasury bond, according to CBK, are 11^th January 2027, 10^th July 2028 for the 5-year treasury bond, and 13^th March 2034 for the 10-year Treasury Bond.

Placing agents are commercial banks, non-bank financial institutions, licensed stock brokers, and investment advisors. Non-competitive bids will be a maximum of KSh 50 million per CSD Account per tenor. This does not apply to State corporations, Public Universities, and Semi-Autonomous Government Agencies. The minimum competitive bid amount is KSh 2 million per CSD amount per tenor.

Treasury bond bids must be submitted via CBK DhowCSD or Treasury Mobile Direct by Wednesday 6^th March for the 3-year and 20^th March 2024 for the 5-year and 10-year Treasury Bonds. The auction date is 6^th March 2024 for the one-year treasury bonds and March 20^th for the 5-year and 10-year treasury bonds.

The three-year treasury bond raised KSh 22.06 billion in its debut issuance in January, with a coupon rate of 18.39%. The first reopening of the 5-year treasury bond was in January raising KSh 2.95 billion. This latest move signals CBK testing the market to see whether the appetite for the long-term is back. The CBK has fixed the coupon for the 10yr at 16%.

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