NAIROBI, Kenya, Aug 19 — The Central Bank of Kenya (CBK) has returned to the market with a tap sale of Sh50 billion in Treasury bonds, following its rejection of most bids in the August reopening.
The tap sale, which opened on August 19 and closes on August 21, offers investors an opportunity to buy additional units of two existing bonds: the 15-year IFB1/2018/015 and the 19-year IFB1/2022/019.
The 15-year bond carries a coupon rate of 12.5 per cent with an accepted yield of 12.99 per cent, while the 19-year bond offers a coupon rate of 12.97 per cent and an accepted yield of 13.99 per cent. Both are priced at adjusted average rates of Sh99.3937 and Sh94.8458 per Sh100.00, respectively.
Settlement for successful bids is set for Monday, August 25, 2025.
The move comes after the government’s August reopening of the two bonds, in which it targeted Sh90 billion in borrowing.
That auction attracted Sh323.4 billion in bids—an oversubscription of 259.3 percent. However, the government rejected Sh228.4 billion, or 70.7 percent of the bids, accepting only Sh95.0 billion (a 29.3 per cent acceptance rate).
Of the accepted bids, non-competitive tenders accounted for Sh64.1 billion, or 67.4 per cent of the total. The amount raised nearly matched Sh94.6 billion in redemptions falling due on the same date.
First-come, first-served
David Luusa, Director of Financial Markets at CBK, said the tap sale will be conducted on a first-come, first-served basis, with bids priced at the average rate of accepted bids from the August auction, adjusted for accrued interest.
“The tap sale offers investors an opportunity to participate in the same bonds at prevailing market rates,” he said.
Analysts note that the decision to reopen the bonds through a tap sale reflects the government’s effort to balance its financing needs while managing borrowing costs. The oversubscription and subsequent rejection of a large portion of bids in the earlier auction point to cautious investor sentiment, particularly in light of the relatively high yields.
Investors interested in the tap sale must submit their bids by August 21, 2025, or until the Sh50 billion target is fully subscribed. Successful bidders will be notified through the DhowCSD Investor Portal, with payment due by 2 p.m. on Monday, August 25, 2025.
