Central Bank Sells 5.19 Bln Worth 10-year T-bond against 30Bln target

Kenya’s Central Bank (CBK) sold Ksh 5.19 billion of its 10-year Treasury bond (FXD 1/2017/10) against the target of Ksh 30 billion.

The results for the auction came in within expected bounds at an accepted yield of 12.966 percent compared to 15.039 percent at last auction.

The subscription fell short by 36.52 percent with bids worth Ksh19.043Bn being received and the CBK accepting Ksh 5.19Bn.

Analysts do not foresee a tap sale as the current environment is not favourable and the CBK is most likely to keep this paper as a card for later on in the fiscal year.

The Bond was aimed for budgetary support.

Read: National Treasury extends Ksh1 billion M-Akiba bond to September 11

Kenyan National Treasury fiscal year 2017/18 national budget amounts to Kshs 2.3 tn, with a 72:28 split between recurrent and county allocation and development expenditure from a split of 67:33 in fiscal year 2016/2017 for recurrent and county allocation and development expenditure, respectively.

The budget will be funded by 77.1 percent in taxes amounting to Kshs 1.7 tn, 13.9 percent of domestic borrowing worth Kshs 317.7 bn, and the remaining 9.0 percent will be funded through foreign borrowing amounting to Kshs 206.0 bn.