Treasury adds Ksh37.4 billion from bonds

The National Treasury has added Ksh.37.4 billion from a secondary bond sale sealed on Thursday.

This to take the size of proceeds from June’s primary and tap sale bonds to Ksh.57.1 billion after raising an initial Ksh.19.7 billion.

The quantum raised in the secondary issue however saw modest demand from the market with investors putting bids worth Ksh.38.5 billion against an advertised Ksh.50 billion.

The subdued subscription rate is largely attributable to an early start to the trading of July’s primary bond issue in which the exchequer seeks to raise Ksh.60 billion, slashing bids on the concluded tap sale.

The Central Bank Bank (CBK) allocated yields of 13.261 per cent and 12.498 per cent for the accepted bids.

The reserve bank is expected to close bids to this month’s primary bond issue on July 13 which features three re-opened papers with tenures of 6.2, 11.9 and 24.9 years.

Treasury is betting on high investor appetites for government securities to have an early head-start in its local borrowing program over the 2021/22 financial year.