Kenyan investors have been invited to participate in a KSh100 billion Treasury bond sale opened by the Central Bank of Kenya (CBK), with two long-term fixed-coupon securities available for investment.
CBK is offering KSh50 billion through each of the two reopened bonds. One has a coupon rate of 12.34% and matures in July 2034, while the second carries a 12.873% coupon rate and matures in March 2039.
“Central Bank of Kenya, acting in its capacity as fiscal agent for the Republic of Kenya, invites bids for the above bonds whose terms and conditions are as follows,” the statement read in part.
Two CBK Treasury Bonds on Offer
From the prospectus, the first security, FXD3/2019/015, has 7.8 years remaining to maturity and a coupon rate of 12.34%. Its maturity date is July 10, 2034.
The second bond, FXD1/2019/020, has 12.5 years remaining to maturity and carries a coupon rate of 12.873%. It will mature on March 21, 2039.
Both securities are subject to a 10% withholding tax. CBK said it will use proceeds from the sale for budgetary support.
Interest payments for each bond will be made according to the coupon payment schedules published in the prospectus.
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Payments on the first bond run from January 2027 until its maturity in July 2034, while those for the second begin in April 2027 and continue until March 2039.
Investors Given September 30 Deadline
The sale opened on September 24 and will remain open until September 30, 2026. Bids must be submitted by 10:00 am on the closing date, with the auction also scheduled for September 30.
“The Period of Sale is 24-Sep-2026 to 30-Sep-2026,” and the “Bid Submission Deadline” is “30-Sep-2026, by 10.00 am,” CBK stated.
Settlement for successful bids will take place on October 5. CBK will use a multi-price auction method, meaning it will allocate securities to successful bidders according to accepted bid prices.
Non-competitive bids must be at least KSh50,000 and no more than KSh50 million. Competitive bids require a minimum investment of KSh2 million per Central Securities Depository (CSD) account for each tenor.
Participation is open to investors with active DhowCSD accounts. Successful bidders must obtain their payment key and amount payable through the CBK DhowCSD Investor Portal or App.
Bonds Can Be Traded and Used as Collateral
Following settlement, secondary trading in both securities will begin on October 5 in multiples of KSh50,000. CBK also reserves the option to reopen the bonds at a future date.
The securities qualify for statutory liquidity ratio requirements for commercial banks and non-bank financial institutions under the Banking Act.
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Investors can also pledge the government securities as collateral when seeking loans from regulated financial institutions.
A pledge that is not canceled at least five days before maturity will result in the securities automatically settling into the lender’s account.
“Investors can pledge Government Securities as collateral to access loans from regulated financial institutions. A pledge not canceled at least five days before the securities mature will result in securities automatically settling to the lender’s account.”
Both bonds will be listed on the Nairobi Securities Exchange, giving investors access to a secondary market after issuance.
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