Treasury Targets Long-Term Funding in Ninth FY25/26 Bond Reopening

The Central Bank of Kenya has launched its ninth bond reopening of FY2025/26, seeking KSh 40 billion through a dual-tranche sale of the 30-year SDB1/2011/030 and the 25-year FXD1/2021/025.

• •The offer, which closes on December 3 and settles on December 8, pushes issuance deeper into the long end of the curve as the Treasury moves to secure durable funding ahead of heavy maturities later in the year.
• •The government’s approach remains consistent with the front-loaded borrowing pattern established since July. By targeting long-duration instruments, the Treasury is locking in predictable funding while reducing rollover risk tied to shorter tenors.
• •Investor positioning has also supported this strategy, with demand for longer bonds strengthening through the second half of the fiscal year as pension and insurance funds continue shifting toward duration.

The December reopening follows a strong November run, including the November 24 auction where bids reached KSh 115.86 billion against a KSh 40 billion offer and the government accepted KSh 54.76 billion. That performance lifted cumulative FY25/26 bond proceeds to roughly KSh 598 billion before the December sale, pushing issuance well above typical midyear levels.

The December auction features two ultra-long securities:

• •SDB1/2011/030 carries a 12.000% coupon with 15.2 years remaining.
• •FXD1/2021/025 offers a 13.924% coupon and 20.4 years to maturity.

With recent auctions clearing slightly below market-weighted yields, investors will watch whether the long-end premium holds amid shifting liquidity conditions.

The Treasury’s issuance path for the remainder of FY25/26 will depend on revenue performance and the redemption calendar.

FY25/26 Treasury Bond Auction Summary (KSh Billion):