The Central Bank of Kenya (CBK) has announced the reopening of three fixed-coupon Treasury bonds, aiming to raise up to KSh 130 billion to support the national budget. The offer, which is open between April 16 and May 7, 2025, features 15-year, 20-year, and 25-year fixed-income bonds previously issued but now reopened for further investment.
This move comes as the government seeks to bolster its fiscal position through domestic borrowing amid rising expenditure pressures and constrained access to international capital markets.
The reopened issues include:
FXD1/2022/015: A 15-year bond (12 years remaining to maturity) with a coupon rate of 13.942%, maturing on 6 April 2037.
FXD1/2022/025: A 25-year bond (22.5 years remaining to maturity) with a coupon rate of 14.188%, maturing on 23 September 2047.
FXD1/2012/020: A 20-year bond (7.6 years remaining to maturity) with a coupon rate of 12.000%, maturing on 1 November 2032.
Investors can submit bids in both competitive and non-competitive categories, with the minimum bid set at KSh 50,000 and a maximum of KSh 50 million for non-competitive tenders. Competitive bids must be at least KSh 2 million per bond for each investor through their Central Securities Depository (CSD) accounts.
The bid submission deadline for FXD1/2022/015 and FXD1/2022/025 is Wednesday, April 30, 2025, by 10:00 am, with the auction taking place on the same day. Settlement will occur on May 5, 2025. For FXD1/2012/020, the bid submission deadline is Wednesday, May 7, 2025, with the auction held on the same day and settlement scheduled for May 12, 2025.
The CBK has earmarked KSh 50 billion each for FXD1/2022/015 and FXD1/2022/025, and KSh 30 billion for FXD1/2012/020, totalling KSh 130 billion.
The proceeds will be used solely for budgetary support, reinforcing the government’s aim to reduce its fiscal deficit without exerting further pressure on external debt. All three bonds carry a 10% withholding tax on interest income, which is consistent with standard tax policy on government securities in Kenya.
Investors must make payments by Friday, May 2, 2025, for the FXD1/2022/015 and FXD1/2022/025 bonds, and by Friday, May 9, 2025, for FXD1/2012/020. Payments should be completed via the CBK DhowCSD Investor Portal or app. The CBK warns that defaulters may be barred from future participation in government securities auctions.
Secondary market trading for these bonds will commence in multiples of KSh 50,000 starting May 5, 2025, for the first two bonds and May 12, 2025, for FXD1/2012/020. Investors needing early liquidity may opt to rediscount their holdings with the CBK, though this is treated as a last resort and subject to prevailing market yields with a rediscount rate of 3% above market or coupon rate.
This reopening of long-term infrastructure bonds is part of a broader government strategy to deepen the domestic debt market and align with Kenya’s medium-term debt management framework. These reopenings provide investors an opportunity to lock in attractive fixed returns at a time when inflation is stabilising and interest rates remain elevated.
With the Kenyan shilling stabilising against major currencies and inflation expected to remain within the CBK’s target band, analysts say the reopened bonds could attract significant interest, particularly from pension funds, insurance firms, and other long-term institutional investors.
Speaking to Envestreet Financial, Nairobi-based financial analyst Caroline Wanjiru noted, “The timing is strategic. With the yield environment still high and investors cautious about equities, these bonds offer a stable alternative for portfolio diversification.”
She added that the 25-year bond in particular, offering a yield of 14.188%, is “a golden opportunity for institutional investors looking to match long-term liabilities with long-duration assets.”
Market participants also expect high uptake for the 15-year bond given its slightly shorter duration and still competitive yield.
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