Treasury rakes in Ksh.80 billion from July bonds

The National Treasury has easily mopped Ksh.79.9 billion from its primary July bond offer surpassing an initial target of raising Ksh.60 billion.

This as investors continue to show an insatiable appetite for government securities having put in bids of Ksh.116.9 billion for the three re-opened bonds, nearly twice the amount sought.

The bids were largely equally split between all three papers on offer even as the shorter timed 6-year FXD1/2012/15 saw the highest interest posting bids of Ksh.48.8 billion.

Average yields for the shorter dated paper beat the advertised 11 per cent coupon rate at 11.56 per cent while the Central Bank of Kenya (CBK) kept returns on the longer-dated issues below their respective coupon rates.

The CBK continues to reject expensive investor bids as the government faces reduced pressure to meet its local borrowing targets on overflowing investor appetites for its securities.

“The 2021-22 financial year has just begun and government spending in July is likely to be low while money market liquidity remains elevated,” noted analysts at AIB-AXYS Africa.

Of the Ksh.79.9 billion in new local borrowing, Ksh.55.5 billion will represent new debt proceeds while Ksh.24.4 billion will be deployed to roll over maturing domestic debt.