T-Bills Oversubscribed The Second Consecutive Week, Closes At 122%

T-bills were oversubscribed for the second consecutive week, with the overall subscription rate coming in at 122.6 percent, down from an oversubscription of 134.8 percent recorded the previous week.

Investor’s preference for the shorter 91-day paper persisted as they sought to avoid duration risk, with the paper receiving bids worth 24.9 billion shillings against the offered 4.0 billion shillings, translating to an oversubscription rate of 621.9 percent, lower than the 643.3 percent recorded the previous week.

Notably, the 182-day and 364-day papers recorded continued under subscriptions of 24.7 percent and 20.7 percent, from undersubscription rates of 5.8 percent and 60.3 percent, respectively, recorded the previous week.

The government accepted bids worth 27.4 billion shillings and rejected 2.0 billion shillings out of the total 29.4 billion shillings bids received, translating to an acceptance rate of 93.0 percent.

The yields on the government papers were on an upward trajectory, with the yields on the 364-day, 182-day, and 91-day papers increasing by 7.5 bps, 6.0 bps, and 6.8 bps to 10.9, 10.4, and 10.1 percent, respectively.

Related Content: T-Bills Back Into The Light After Weeks In The Dark

In the Primary Bond Market, the government sought to raise an additional 10.0 billion shillings to fund infrastructural projects by offering a tap sale of an infrastructure bond IFB1/2023/17 with a tenor to maturity of 17 years.

The Bond received bids worth 5.1 billion shillings, translating to an undersubscription rate of 51.2 percent, partly attributable to continued tightened liquidity in the money market with the average interbank rate increasing by 0.3 percent points to 8.4 percent, from 8.1 percent recorded last week.

The acceptance rate for the tap sale was 100.0 percent and both the weighted average yield and the coupon rate were at 14.4 percent.

Key to note, this is the second Tap Sale for the infrastructure bond offered in the market after the first one was offered on 8 March 2023 which was also undersubscribed at 63.6 percent, mainly attributable to tightened liquidity.

Related Content: T-Bills Waded Through Q1 To Remain Above 100%