Treasury Seeks Ksh.60 Billion from Domestic Market with Reopened Treasury Bond

The Central Bank of Kenya (CBK) is in search of funds to support the current budget and has floated a Ksh.60 billion Treasury Bond in the domestic market.

This reopened bond offers a mix of two-, three-, five-, and ten-year fixed coupon options, aiming to raise funds for fiscal support.

Interested Bidders

Investors have until May 6, 2024, to submit their bids, with the bonds priced at a competitive 15% interest rate.

The details of the coupon rates for the different maturity periods are as follows: a two-year paper at a coupon rate of 16.9%, a three-year paper at 18.3%, a five-year paper at 16.8%, and a ten-year paper at 14.1%.


Also Read: CBK Seeks Ksh.40 Billion in Domestic Market for Budgetary Support

The first three papers are subject to a 15% Value Added Tax (VAT), while the ten-year paper attracts a 10% VAT.

Attractive Returns for Investors

Despite this, the bonds are designed to offer attractive returns and qualify for the statutory liquidity requirement ratio for both commercial banks and non-bank financial institutions.

In case of unforeseen circumstances, the CBK has outlined a safety net by mentioning that it will rediscount the bonds as a last resort at a rate of 3% above the prevailing market yield or the coupon rate, whichever of the two is higher.

This serves as a prudent measure to ensure the stability and reliability of the bond issue.

Treasury Seeks Ksh.60 Billion from Domestic Market with Reopened Treasury Bond
CBK Governor Kamau Thugge
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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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