T-Bills Remained Undersubscribed During The Q3

During the third quarter of 2021, T-bills were undersubscribed, with the overall subscription rate coming in at 87.8 percent, down from 115.3 percent recorded in Q2’2021, as investors shifted their interest to the bond market in search of higher yields.

The subscription rate for the 91-day and 182-day papers increased to 163.1 and 92.1 percent, respectively, from 94.2 and 56.1 percent, recorded in Q2’2021.

On the other hand, the subscription rate for the 364-day paper declined to 39.0 percent, from 183.0 percent recorded in Q2’2021.

The average yields for the 364-day, 182-day, and 91-day papers declined to 7.6, 7.1, and 6.7 percent in Q3’2021, respectively, from 9.0, 7.8, and 6.9 percent, recorded in Q2’2021.

The acceptance rate in Q3’2021 increased to 94.7 percent, from 66.7 percent in Q2’2021, with the government accepting a total of 237.0 billion shillings, of the 252.8 billion shillings worth of bids received.

During the week, T-bills remained undersubscribed, with the overall subscription rate coming in at 42.2 percent, a marginal decline from 42.3 percent recorded the previous week.

The 91-day paper recorded the highest subscription rate, receiving bids worth 2.6 billion shillings against the offered 4.0 billion shillings, translating to a subscription rate of 66.0 percent, a decrease from 119.8 percent recorded the previous week.

The subscription rate for the 182-day and the 364-day papers increased to 53.4 and 21.6 percent, from 46.7 and 7.0 percent, respectively, recorded the previous week.

The yields on the 91-day and 364-day papers increased by 0.9 bps and 5.9 bps, to 6.9 and 7.9 percent, respectively, while the yield on the 182-day paper remained unchanged at 7.3 percent.

The government accepted 9.6 billion shillings, out of the 10.1 bn bids received, translating to an acceptance rate of 94.9 percent.

At the same time, during Q3’2021, the Government issued nine Treasury bonds seeking to raise 245.0 billion shillings and they were generally oversubscribed, receiving bids totaling 411.3 billion shillings.

The government was keen on maintaining low rates and thus accepted only 304.4 billion shillings of the 411.3 billion shillings worth of bids received, translating to an acceptance rate of 78.2 percent.