The Central Bank of Kenya (CBK) successfully raised KES 94.04 billion through the auction of three re-opened fixed-coupon Treasury bonds, surpassing its initial target of KES 80.00 billion. The auction, which concluded on May 6, 2026, attracted significant investor interest, recording an overall performance rate of 132.52% as total bids received reached KES 106.02 billion. The proceeds from these issues are designated for budgetary support for the national government.
The auction featured two 20-year papers and one 25-year paper with varying remaining tenors and market-determined yields:
- FXD1/2012/020 (6.6 years remaining): This paper was the most popular, attracting bids worth KES 47.95 billion. The CBK accepted KES 47.53 billion at a weighted average rate of 12.4573%, slightly above its coupon rate of 12.0000%.
- FXD1/2019/020 (13 years remaining): This bond received KES 17.57 billion in bids, with the CBK accepting KES 14.54 billion. The weighted average rate for accepted bids was 13.2126%, compared to a coupon rate of 12.8730%.
- FXD1/2021/025 (20.1 years remaining): Investors placed bids totaling KES 40.50 billion for this long-dated security. The CBK accepted KES 31.97 billion at a weighted average rate of 13.6949%, which is below its fixed coupon rate of 13.9240%.
The overall bid-to-cover ratio for the auction stood at 1.13.
CBK Application of Funds
Of the KES 94.04 billion accepted, the National Treasury has allocated KES 57.13 billion toward redemptions, while KES 36.91 billion will represent new borrowing/net repayment.
Secondary trading for all three bonds is scheduled to commence on the Nairobi Securities Exchange (NSE) on Monday, May 11, 2026, in multiples of KES 50,000.00. All three bonds are subject to a 10% withholding tax.These securities qualify for statutory liquidity ratio requirements for both commercial banks and non-bank financial institutions under the Banking Act.
