Treasury goes for another Ksh.60 billion from bonds

The National Treasury has sought to raise a further Ksh.60 billion from the re-opening of three bonds this week.

This is as the exchequer steps further on the throttle to profit from heavy investor appetites for government securities at this time.

On Tuesday, the Central Bank of Kenya (CBK) announced the re-opening of three bonds with tenures of 6.2, 11.9 and 24.9 years respectively which trade to July 13.

At the same time, the exchequer is already in the market seeking to mop Ksh.50 billion from a secondary bond sale covering the close of the 2020/21 financial year.

High appetite for government securities by investors has been demonstrated in the recent June primary bond issue in which the investors bid Ksh.65 billion from a Ksh.30 billion bond issue.

The CBK will seek to leverage the high investor interest snub aggressive bidding as it seeks to keep yields on the re-opened issues near the advertised coupon rate of 11, 12.65 and 13.924 per cent respectively.

In the June primary issue for instance, the CBK cut out Ksh.45.2 billion worth of investor bids in its battle to keep interest payments to investors in check.

The reserve bank is meanwhile expected to close out June’s Ksh.50 billion tap sale on Thursday after failing to reach the bond’s quantum earlier.

The rush by the exchequer to quickly mobilize funds from domestic borrowing is expected to shape the financial markets at the start of the new 2020/21 financial year with investors likely to favor the safe-haven class of investments amidst on-going COVID-19 risks.