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- CBK Opens Bids for KES 70 Billion in High-Yield Treasury Bonds
The Central Bank of Kenya (CBK) has launched a substantial investment opportunity, reopening 15-year and 25-year fixed coupon treasury bonds with a total offering of 70 billion Kenyan shillings, aimed at bolstering budgetary support.
The auction, structured as a Multi-Price Bid, invites investors to participate in securing long-term returns, with bidding open until April 2, 2025.
The Central Bank is presenting three distinct bonds.First, there is FXD1/2022/025, a twenty-five year bond reaching maturity in 22.6 years, identified by ISIN KE8000005093 and carrying a coupon rate of 13.9420%, with a maturity date of 05/02/2035.
Second, FXD1/2022/015, a fifteen-year bond maturing in 12.1 years, with ISIN KE7000009329, boasting a coupon rate of 14.1880% and maturing on 06/04/2037.
And Lastly, there’s FXD1/2020/015, another fifteen-year bond but with 9.9 years to maturity, ISIN KE6000007218, offering a coupon rate of 12.7560% and maturing on 23/09/2047.
It’s important for investors to note that a 10% withholding tax applies across all these bonds.
For those looking to participate, there are specific bid amount guidelines.Non-competitive bids are welcome within a range: the minimum is KES 50,000.00, while the maximum is KES 50,000,000.00.
Competitive bids, on the other hand, require a minimum of 2 million per CSD account per tenor.
Successful bidders will need to obtain their payment key and the payable amount from the CBK DhowCSD Investor Portal/App, accessible under the transactions tab on Friday, April 4, 2025.
The Central Bank also clarifies a few other important points.
Secondary trading in these bonds is set to begin on Monday, April 7, 2025, with transactions in multiples of 50,000.00.
In terms of liquidity, the Central Bank states it will rediscount bonds as a last resort, applying a rate of 3% above the prevailing market yield or coupon rate, whichever is higher.
This rediscounting process will be initiated upon receiving written instructions from investors.
In addition, the Central Bank of Kenya retains the authority to either accept applications in full, in part, or to reject them entirely, without needing to provide any explanation.
