The Ksh. 50 billion bond that was issued was oversubscribed, raising Ksh. 67 billion for the 6.5-year bond offering. This suggests that long-term government securities, which are regarded as reliable and secure assets, are in great demand among investors. The low interest rates in the money market, which deter people from choosing alternative investments, are another factor contributing to the oversubscription.
In contrast to the previous bond auctions in 2023, where the average acceptance rate was 63%, the CBK approved 76% of all offers received.
According to this, the CBK was willing to borrow more money than its initial goal of Ksh. 50 billion since it was pleased with the bids’ quality and pricing.
The bond had a 100% weighted average rate of accepted bids, which means that all the accepted bids had the same interest rate.
This is not typical for bond auctions, when bidders can choose from a range of interest rates.
The bond offering drew offers that were both competitive and non-competitive—that is, bids that solely included the amount or the interest rate, respectively.
Competitive bidders received 50.7% of the approved bids by the CBK, while non-competitive bidders received 49.3%.
The Kenyan shilling performed well versus the US dollar on the day of the auction as a result of the bond sale, rising by 0.23%.
The demand for the local currency surged as a result of the bond issue drawing in foreign investors.
The yield curve, which shows the connection between interest rates and bond maturities graphically, was also improved by the bond issue.