Investors Shy Away From Re-Issued 5-Year Treasury Bond -

Domestic investors shunned the Ksh30 billion 5-year bond re-issued last week for budgetary support. The bond received bids amounting to Ksh20.5 billion translating to a 68% subscription. However, CBK accepted Ksh.8.9 billion from domestic investors.

The bond had a fixed coupon rate of 11.67%.

MAY BONDS

Treasury has been sweeping the domestic market for funds through treasury bills and bonds.

• 6 May – Treasury 5-year bond auction raised Ksh20 billion
• 7 May – T-Bill auction raised Ksh14 billion
• 14 May – T-Bill bill auction collected Ksh24 billion
• 20 May – Re-opened 5-year bond raises Ksh8.9 billion

Additionally, Treasury is seeking to raise KSh 25.6 Billion from the domestic market through a six-year infrastructure bond. The funds will assist the government in financing various infrastructure projects. Only investors with holdings in the one-year Treasury Bill are eligible to bid for this bond. The plan by CBK to switch the Treasury Bill investors to the longer-term 6-year bond indicates pressure on the exchequer to meet its short term debt obligations.

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