Treasury raises Ksh.60 billion from October’s bond sale as investors troop back

The National Treasury raised a total of Ksh.60 billion from October’s bond sale, representing another easy scoop of funds from the local debt market. This is as investors trooped back to take investments in government securities have made bids totalling to Ksh.69.1 billion against a pre-advertised offer of Ksh.50 billion. The investor bids were concentrated on the longer re-opened 25 year bond whose present time to maturity stands at 22.7 years based on its attractive yields. The 25-year bond sale saw bids totalling to Ksh.46 billion with the shorter 20 year bond with 10.6 years to maturity fetching bids amounting to Ksh.23.2 billion. Investors will receive a 13.5 per cent interest pay-out from the long-tenured bond while the shorter offer will pay out a 12.1 per cent interest rate. The National Treasury continues to find easy pickings from the domestic debt market as investors continue to favour safe haven investments. Greater local borrowing comes as the markets continue to register ample liquidity with the average interbank rate- the effect lending rate between commercial banks falling to 2.1 per cent in the past week from 3.3 per cent. While bond sales traditionally lead to tapered investments in Treasury bills- the weekly traded shorter government papers, T-bills in the past week were oversubscribed at 110 per cent from 64.9 per cent in the previous week. A partly Ksh.33.4 billion of funds raised from the bond sale will be channelled to redemptions with the balance seeping into new government borrowings for the 2020/21 fiscal year.

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