CBK Opens KES 40 Billion Treasury Bond Offer as Government Targets Budget Financing

The Kenyan government has returned to the domestic debt market with a KES 40 billion Treasury bond offer through the reopening of two long-dated Fixed Coupon Treasury Bonds, as it seeks to finance budgetary requirements during the 2026/27 fiscal year.

The Central Bank of Kenya (CBK), acting as the fiscal agent for the Republic of Kenya, announced the reopening of the FXD1/2019/020 and FXD1/2022/025 Treasury bonds, inviting investors to submit bids between July 14 and July 22, 2026.

According to the offer, all bids must be submitted by 10:00 a.m. on July 22, 2026, when the auction will also be conducted. Successful investors will settle their purchases on July 27, 2026, with proceeds from the issuance earmarked for budgetary support.

Two Long-Term Treasury Bonds Reopened

The first security on offer is Issue Number FXD1/2019/020, a reopened 20-year Fixed Coupon Treasury Bond that now has 12.8 years remaining to maturity.

The bond carries a 12.873% annual coupon, bears the ISIN KE5000009984, and is scheduled to mature on March 21, 2039. Interest earned on the bond is subject to a 10% withholding tax.

The second security is Issue Number FXD1/2022/025, a reopened 25-year Fixed Coupon Treasury Bond with 21.4 years remaining to maturity.

It offers investors a 14.188% annual coupon, carries the ISIN KE8000005093, and will mature on September 23, 2047. Like the 20-year issue, returns are subject to a 10% withholding tax.

The reopening allows the government to increase the outstanding amount of existing securities rather than issuing entirely new bonds, improving liquidity in the secondary market while meeting its financing needs.

Investment Requirements for Treasury Bond Bidders

For non-competitive bids, investors can invest a minimum of KES 50,000 and a maximum of KES 50 million. Competitive bidders, meanwhile, must submit applications of at least KES 2 million per Central Securities Depository (CSD) account for each bond tenor.

Following the auction, successful bidders will be required to obtain their payment key and payable amount through the CBK DhowCSD Investor Portal or Mobile App under the Transactions tab on Friday, July 24, 2026.

The Central Bank cautioned that investors who fail to honour their payment obligations may face suspension from participating in future Government securities investments.

CBK Retains Discretion over Bond Allocation

The CBK noted that it reserves the right to accept bids in full or in part, or reject all applications without providing reasons.

The reopened Treasury bonds will begin trading on the Nairobi Securities Exchange (NSE) from Monday, July 27, 2026, in minimum trading multiples of KES 50,000, giving investors the opportunity to buy and sell the securities in the secondary market.

Rediscount Facility Available for Investors

The Central Bank also confirmed that it will rediscount the bonds as a last-resort liquidity facility at a rate 3 percentage points above the prevailing market yield or the coupon rate, whichever is higher.

Investors seeking rediscount services will be required to submit their requests electronically through the CBK DhowCSD Investor Portal or Mobile App by selecting the Rediscount option under the Instructions menu.

The Bank added that the two Treasury bonds may be reopened again in the future depending on the government’s borrowing requirements.

Treasury Bonds Eligible for Liquidity Requirements and Loan Collateral

The CBK said both Treasury bonds qualify for statutory liquidity ratio (SLR) requirements applicable to commercial banks and non-bank financial institutions under the Banking Act Cap 488.

In addition, investors can use the Government securities as collateral when borrowing from regulated financial institutions.

However, the Central Bank warned that any pledge not cancelled at least five days before the bond matures will automatically result in the securities being transferred to the lender’s account upon redemption.