Treasury Bills Oversubscribed by a Marginal 0.2% Compared to Previous Week

Treasury bills were oversubscribed during the week, with the overall subscription rate coming to 104.7 percent compared to 140.5 percent recorded the previous week.

The subscription rates for the 91, 182 and 364-day papers came in at 124.2, 84.3, and 117.3 percent compared to 116.8, 112.2 and 178.3 percent respectively the previous week.

Yields on the 91 and 182-day papers remained unchanged at 8.0 percent and 10.4 percent respectively while the yield on the 364-day paper declined by 10 bps to 11.1 percent from 11.2 percent the previous week.

The overall acceptance rate increased to 96.3 percent compared to 81.4 percent the previous week, with the government accepting a total of 24.2 billion shillings of the 25.1 billion shillings worth of bids received, against the 24.0 billion shillings on offer.

The government is ahead of its domestic borrowing target for the current fiscal year, having borrowed 218.3 billion shillings against a target of 194.6 billion shillings (assuming a pro-rated borrowing target throughout the financial year of 297.6 billion shillings from the 2018 Budget Policy Statement (BPS) that was approved by the Cabinet).

Last week, the Kenyan Government re-opened two bonds, FXD 1/2010/15 and FXD 2/2013/15, with effective tenors of 7.1 and 10.2 years, and coupons of 10.3 percent and 12.0 percent respectively, in a bid to raise 40.0 billion shillings for budgetary support.

The overall subscription rate for the issue came in at 60.4 percent with the market-weighted average bid rates coming in at 12.8 percent and 13.0 percent 10 bps above the average accepted rates of 12.7 percent and 12.9 percent respectively.

The government accepted only 13.2 billion shillings out of the 24.1 billion shillings worth of bids received, translating to an acceptance rate of 54.7 percent.