The Treasury Manages KES 35.9Bn Sale on Bonds From KES 40Bn Target

During the month of May, the Kenyan government re-opened two bonds (FXD 2/2010/10 and FXD 1/2009/15), with effective tenors of 3.4 and 7.4 years and coupons of 9.3 and 12.5 percent respectively in a bid to raise 40.0 billion shillings for budgetary support.

The market average rates for the bids came in at 12.6 and 13.4 percent while the average yields of the accepted bids were 12.5 and 13.1 percent for the two bonds respectively.

Just like the previous bond auctions held this year, the government did not accept expensive bids accepting 20.0 billion shillings out of the 38.8 billion shillings worth of bids received translating to an acceptance rate of 51.5 percent.

The government also opened the same bonds through a tap sale, collecting 15.9 billion shillings meaning the government managed to collect a total of 35.9 billion shillings from the bond issues representing 89.8 percent of the 40.0 billion shillings it had initially intended to collect.

The secondary bonds market recorded increased activity with turnover rising by 55.9 percent to 43.8 billion shillings in the month of May from 28.1 billion shillings recorded in April. The performance for the secondary bonds stood at 1.7 percent in May as per the NSE FTSE Bond Index as shown in the two images below:

Secondary Market Bond Turnover

Yield Curve for Bonds in Percentage