Treasury goes for Ksh.60 billion from October bonds

Treasury goes for Ksh.60 billion from October bonds

The National Treasury intends to raise Ksh.60 billion from Treasury bonds (T-bonds) next month.

The Central Bank of Kenya (CBK), which represents the exchequer in the issuance of its debt instruments, has re-opened three previous T-bonds to investors.

The three bonds; FXD1/2013/15, FXD3/2019/15 & FXD1/2021/24 have 6.4, 12.9 and 24.7 years to maturity and are open for sale to investors until October 5.

The National Treasury will be seeking to continue its streak in meeting its local borrowing target with all previous issues of bonds in the 2021/22 fiscal year so far meeting their target.

This is as investors continue to favor the safe haven instrument amidst continued volatility in alternative investment classes such as equities.

On its part, the CBK will endeavor to keep investor bids within the pre-advertised yield curve of 11.25, 12.34 and 13.92 per cent respectively for the three papers.

Meanwhile, investors in the three Treasury papers are expected to balance out between high yields for the longer-dated issue and longevity risks which could see bids spread out consistently across all three bonds.

In the first two months of the 2021/22 financial year, Treasury has mobilized Ksh.200.3 billion in gross domestic borrowing, representing about 20 per cent of its new local debt target to June next year (Ksh.1.008 trillion).

Earlier this month, Treasury mopped Ksh.107 billion from the local credit market, surpassing its initial borrowing target by nearly Ksh.32 billion.