Treasury targets Sh60 billion from two bond auctions next January


The Treasury is targeting Sh60 billion from two bond auctions in January 2022, looking to take advantage of a lack of maturing debt in the month to close the domestic borrowing target for the year.

The Central Bank of Kenya (CBK), the State’s fiscal agent, said the first of the auctions will take place on January 4, for a reopened five-year bond first sold in 2020.

The second auction consists of two re-opened 10-year and 20-year papers first sold in 2018 and August 2021 respectively, whose sale will run until January 18.

The bonds will have 3.4 years, seven years and 19.7 years to maturity respectively, offering coupons of 11.67 percent, 12.5 percent and 13.44 percent.

The CBK rarely splits a month’s bond sale into two separate auctions, even when floating three-tranche offers.

The sales come in a period of rising liquidity in the money market, which bodes well for the prospect of raising the full amount. CBK said in its weekly bulleting last Friday that the liquidity is being supported by government payments that have offset tax remittances in the banking system.