The Central Bank of Kenya (CBK) has opened subscriptions for two reopened Treasury bonds with a combined target of KSh40 billion to support government financing needs. The offer includes a 15-year and a 25-year fixed-coupon bond, both available to retail and institutional investors. With a minimum investment of KSh50,000 for non-competitive bids, the auction provides ordinary Kenyans an opportunity to invest in long-term government securities while earning fixed coupon income.
Key Overview
- CBK has launched a KSh40 billion Treasury bond auction.
- The offer includes a reopened 15-year and 25-year Treasury bond.
- The 15-year bond carries a coupon rate of 12.7560%.
- The 25-year bond offers a coupon rate of 13.4000%.
- Retail investors can participate with a minimum investment of KSh50,000.
- Competitive bids require a minimum investment of KSh2 million.
- The auction closes on June 3, 2026, at 10:00 a.m.
- Successful bids will be settled on June 8, 2026.
- The bonds will be listed on the Nairobi Securities Exchange.
- Funds raised will support government budgetary requirements.
CBK Opens New Treasury Bond Auction
The Central Bank of Kenya has invited investors to participate in a new Treasury bond auction aimed at raising KSh40 billion for government financing needs.
The offer consists of two reopened Treasury bonds that provide investors with an opportunity to earn fixed returns over the long term while contributing to the government’s domestic borrowing programme.
The bonds are available to both institutional and retail investors, reinforcing CBK’s efforts to broaden participation in Kenya’s government securities market.
With a minimum investment threshold of just KSh50,000 for non-competitive bids, the auction remains accessible to individual investors seeking stable income and capital preservation through government-backed instruments.
Two Long-Term Bonds on Offer
The latest auction features two previously issued Treasury bonds that have been reopened for additional subscriptions.
The first instrument is the FXD1/2020/015 bond, a 15-year fixed-coupon Treasury bond that was initially issued in 2020. Although originally structured as a 15-year instrument, it now has approximately 8.7 years remaining before maturity.
The bond offers a fixed annual coupon rate of 12.7560% and is scheduled to mature on February 5, 2035.
The second instrument is the FXD1/2018/025 bond, originally issued in 2018 as a 25-year Treasury bond.
This security currently has approximately 17.1 years remaining until maturity and carries a fixed coupon rate of 13.4000%. The bond will mature on May 25, 2043.
The higher coupon on the longer-dated bond reflects the additional duration and investment horizon required by investors.
Retail Investors Can Participate From KSh50,000
One of the key features of the auction is the low entry requirement for individual investors.
For non-competitive bids, investors can participate with a minimum investment of KSh50,000. Non-competitive bidders do not specify a preferred yield and instead accept the weighted average yield determined during the auction process.
The maximum investment allowed under the non-competitive category is KSh50 million.
This structure makes Treasury bonds accessible to retail investors who may not have the expertise or resources required to submit competitive bids.
The approach also supports financial inclusion by enabling ordinary Kenyans to access government securities that were once largely dominated by institutional investors.
Competitive Bids Target Larger Investors
Institutional investors and high-net-worth individuals can participate through the competitive bidding process.
Under this category, investors specify the yield they are willing to accept for the bond.
The minimum investment for competitive bids is KSh2 million per Central Securities Depository (CSD) account for each bond tenor.
Competitive bidding is typically preferred by pension funds, insurance companies, fund managers, banks, and sophisticated investors seeking greater control over investment returns.
The allocation of competitive bids is influenced by prevailing market conditions and investor demand during the auction.
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Auction Timeline and Settlement Process
The subscription window for the Treasury bond offer opened on May 29, 2026, and will remain available until June 3, 2026.
All applications must be submitted before 10:00 a.m. on Wednesday, June 3, which also serves as the official auction date.
After the auction process is completed, successful investors will be required to obtain their payment reference details through the CBK DhowCSD Investor Portal or mobile application.
The payment information will become available on June 5, 2026.
Settlement of successful bids is scheduled for Monday, June 8, 2026.
CBK has cautioned investors that failure to complete payments after receiving allocations may result in suspension from future participation in government securities auctions.
Pricing and Yield Guidance
To assist investors in evaluating the bonds, the Central Bank provided indicative pricing based on various yield-to-maturity (YTM) levels.
For the 15-year bond, a yield-to-maturity of 12.7500% corresponds to a clean price of 99.9843.
Meanwhile, the 25-year bond records a clean price of 100.1582 at a yield-to-maturity of 13.3750%.
Yield-to-maturity represents the total expected return an investor would earn if the bond is held until maturity, taking into account both coupon payments and any price difference between purchase and redemption value.
These pricing references help investors estimate fair market values before submitting bids.
NSE Listing Enhances Liquidity
Investors purchasing the bonds will not be required to hold them until maturity.
Following settlement, both securities will be listed on the Nairobi Securities Exchange, allowing investors to buy and sell them in the secondary market.
Secondary trading is expected to commence on June 8, 2026, the same day as settlement.
Transactions on the exchange will be conducted in multiples of KSh50,000, providing investors with flexibility to adjust their portfolios based on changing market conditions or liquidity needs.
The ability to trade Treasury bonds on the NSE enhances market liquidity and makes government securities more attractive to a broader range of investors.
Why the Auction Matters
The latest bond offer comes as the Kenyan government continues to rely on domestic borrowing to finance budgetary requirements while managing debt obligations.
Treasury bonds remain one of the government’s primary funding instruments and are widely regarded as low-risk investments because they are backed by the full faith and credit of the Government of Kenya.
For investors, the bonds provide an opportunity to lock in relatively attractive fixed returns while benefiting from predictable semi-annual coupon payments.
The reopening of existing bonds also helps deepen the domestic bond market by increasing the size and liquidity of outstanding issues.
Outlook
The KSh40 billion Treasury bond auction offers investors an opportunity to access long-term government securities with fixed coupon rates of 12.7560% and 13.4000%. With participation starting from just KSh50,000, the offer is expected to attract both retail and institutional investors seeking stable returns in a government-backed investment. As the bonds become available for secondary trading on the NSE, investors will also benefit from enhanced liquidity and greater flexibility in managing their portfolios.
Sources: Tuko, Kenya Times, Streamline Feed, Tradingroom
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