Treasury Raises KSh 52.8 Billion in November Treasury Bond Reopening

The Treasury has extended its front-loaded domestic borrowing strategy after raising KSh 52.83 billion in the November reopening of two Treasury bonds.

• •The auction attracted KSh 92.91 billion in bids against a KSh 40 billion offer, reinforcing the National Treasury’s push to secure funding early in the fiscal year to manage refinancing pressures and stabilize the deficit path.
• •With this reopening, cumulative Treasury bond proceeds in FY2025/26 rise to around KSh 543 billion, placing the government about 86% of its annual bond issuance target within the first half of the fiscal year.
• •The front-loading approach aims to reduce rollover risk and lock in funding before periods of heavier maturities and potential volatility in external markets.

The 7-year FXD1/2012/020 cleared at an average accepted yield of 12.47%, while the 11.4-year FXD1/2022/015 priced at 13.34%. Both yields remain broadly aligned with October levels, indicating investor willingness to extend duration at current rates.

Demand leaned toward the longer tenor, which accounted for 63.6% of accepted bids, consistent with pension and insurance sector allocation patterns.

2025/26 Fiscal Year Auctions Summary (KSh Billion):

*Net Borrowing = Amount Accepted minus Redemptions where applicable.

The front-loading strategy supports fiscal predictability but raises questions over interest costs and private sector credit conditions. The Treasury maintains the approach reduces refinancing vulnerability, with additional issuance likely in December.