The national treasury is seeking to raise KSh60 billion through the auction of reopened 10-year and 20-year bonds according to a prospectus issued by the Central Bank today. CBK said it is reopening a 10-year bond issued in 2019, a 20-year bond issued in 2018 and another 20-year bond issued this year. The treasury bonds have 8.1 years, 16.7 years, and 20 years to maturity respectively.
Government aims to collect the funds from the domestic market to use in budgetary support. The sale of the treasury bonds opened on 26th July and will run until 10th August.
According to the bond prospectus, the 10-year debt instrument carries a coupon rate of 11.517% p.a., the 20-year bond issued in 2018 has a coupon rate of 13.2% p.a. and the 2021 20-year bond will have a market-determined coupon rate.
The money market remains highly liquid and investors are expected to take up the reopened long-term bonds. The tap sale of two 20-year Fixed-rate Treasury bonds last month received bids totalling KSh 38.5 billion against an advertised amount of KSh 50.0 billion, representing a performance of 77.0%.
Secondary trading of the bonds will begin on 17th August 2021.