Elijah Ntongai, a journalist at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan and global trends.

The Central Bank of Kenya (CBK) is seeking to raise KSh 50 billion from the domestic market through the re-opening of two fixed coupon Treasury bonds.

CBK has invited investors to submit bids by Wednesday, June 18, 2025, at 10:00 am. The funds will be used to support the government’s budgetary needs.

The two bonds on offer are the FXD1/2020/015, which has 9.7 years to maturity, and the SDB1/2011/030, with 15.7 years left to maturity.

According to the prospectus released by the CBK, the bonds have respective coupon rates of 12.756% and 12.000%, subject to a 10% withholding tax on interest earned.

The auction will be held on June 18, 2025, with the settlement date slated for June 23, 2025.

Investors will participate via the CBK DhowCSD Investor Portal or App, where successful bidders can obtain their payment keys and amounts payable on Friday, June 20, 2025.

CBK noted that the minimum non-competitive bid is KSh 50,000, while the maximum non-competitive cap is set at KSh 50 million. For competitive bids, investors must submit a minimum of KSh 2 million per CSD account per tenor.

For FXD1/2020/015 (12.756% coupon) CBK noted that the bond attracts Accrued Interest (AI) of KSh 4.4155 per KSh 100 while the SDB1/2011/030 will attract AI of KSh 4.3846 per KSh 100 and the withholding tax will be computed on clean prices.

The pricing tables released by CBK offer detailed yield-to-maturity (YTM) versus clean price guidance for both instruments.

Notably, secondary trading will begin on Monday, June 23, 2025, in multiples of KSh 50,000 and rediscounting will only be permitted as a last resort and will attract a penalty rate of 3% above either the market yield or the bond's coupon rate, whichever is higher.

The CBK has reiterated that defaulters may be barred from participating in future government securities, and it retains full discretion to accept, partially fill, or reject any application without giving reasons.

The offer comes at a time when government borrowing is under scrutiny amid mounting public debt and constrained revenue streams.

Earlier TUKO.co.ke reported that Kenya's public debt has surged to KSh 11.02 trillion, with KSh 5.09 trillion in external loans and KSh 5.93 trillion in domestic deb.

This has prompted Treasury CS John Mbadi to announce a comprehensive audit to ensure transparency as Treasury projects debt could hit KSh 13.2 trillion by 2027.

Source: TUKO.co.ke