Treasury eyes Ksh.30 billion as it closes out local borrowing

The National Treasury has eyed a modest Ksh.30 billion from bonds in June as it closes out local borrowing for the fiscal year.

On Wednesday, the Central Bank of Kenya (CBK) which stands in for the exchequer in auction sales re-opened two bonds which will be open to investor bids until June 15.

The pair of 20 year bonds have a tenure of 11.4 and 17.9 years respectively.

Investors are likely to favor bids in the longer timed paper as they chase a greater return on investing.

On its part, the Central Bank of Kenya (CBK) is expected to whip investors into making conservative bids within the range of the bonds coupon rates-12 and 12.873 per cent.

The National Treasury has enjoyed a relatively successful domestic borrowing program this year supported in part by investors favoring safe heaven government securities in the wake of the COVID-19 pandemic.

As of April 30, the National Treasury had successfully mobilized 85.5 per cent of expected funds from local borrowing or an equivalent Ksh.729.6 billion representing gross domestic borrowing.

At Ksh.853.8 billion, estimated total gross domestic borrowing to June 30 represents about 29 per cent of available exchequer revenues.