03/06/2026
During the week, the Central Bank of Kenya released the auction results for the re-opened treasury bonds FXD1/2020/015 and FXD1/2018/025 with tenors to maturities of 8.7 years and 17.1 years respectively and fixed coupon rates of 12.8% and 13.4% respectively. The bonds were undersubscribed, with the overall subscription rate coming in at 86.0%, receiving bids worth Kshs 34.4 bn against the offered Kshs 40.0 bn.
The government accepted bids worth Kshs 34.38 bn, translating to an acceptance rate of 99.97%. The weighted average yield for the accepted bids for the FXD1/2020/015 and FXD1/2018/025 came in at 13.3% and 14.2% respectively. Notably, the 13.3% and 14.2% yields on FXD1/2020/015 and FXD1/2018/025 were both higher than the 12.2% and 13.0% recorded at the last reopening in 6th April 2026.
With the Inflation rate at 6.7% as of May 2026, the real returns of the FXD1/2020/015 and FXD1/2018/025 are 6.6% and 7.5% respectively. Given the 10.0% withholding tax on the bonds, the tax equivalent yields for shorter term bonds with 15.0% withholding tax are 13.6% for the FXD1/2020/015 while that of the FXD1/2018/025 are 14.1%;
