Kenyan investors have another opportunity to invest directly in government debt after the Central Bank of Kenya reopened two long-term fixed-coupon Treasury bonds targeting KSh50 billion for budgetary support.
LIVEKenya bond yields: Average yield 11.93% across 58 bonds · 16 OctSee yields →The offer covers FXD3/2019/015 and FXD1/2019/020, two bonds originally issued in 2019 and now returning to the market with remaining maturities extending to 2034 and 2039 respectively. Investors have until September 30, 2026, to submit bids ahead of settlement on October 5.
Key Overview
- CBK is seeking KSh50 billion in total through two reopened Treasury bonds.
- FXD3/2019/015 carries a 12.34% coupon and matures on July 10, 2034.
- FXD1/2019/020 carries a 12.873% coupon and matures on March 21, 2039.
- The sale runs from September 24 to September 30, 2026.
- Non-competitive bids start from KSh50,000.
- Competitive bids require at least KSh2 million per CSD account per tenor.
- Interest on both securities is subject to 10% withholding tax.
- Successful investors can trade the bonds in the secondary market after settlement.
Two Reopened Bonds Give Investors Long-Term Options
The first security, FXD3/2019/015, is a reopened 15-year bond with roughly 7.8 years remaining until maturity. It carries a fixed coupon of 12.34% and is scheduled to mature on July 10, 2034.
The second, FXD1/2019/020, was originally issued as a 20-year bond and has about 12.5 years remaining. It offers a higher coupon of 12.873% and matures on March 21, 2039.
The current bond terms show that the two bonds together target KSh50 billion rather than KSh50 billion each. The proceeds are intended to support government budget financing.
Because these are reopened bonds rather than newly issued securities, investors are purchasing the remaining period to maturity rather than beginning a fresh 15-year or 20-year holding period.
Coupon Rate Is Not the Same as Investor Yield
The advertised 12.34% and 12.873% figures are the fixed coupon rates applied to the securities’ face value. They should not automatically be interpreted as the exact annual return a new investor will receive.
The final investment yield depends on the price at which the bond is allocated during the auction. CBK is using a multi-price auction, meaning successful competitive investors can receive allocations at different accepted prices and yields.
This distinction is particularly important when existing bonds are reopened. A bond can trade above or below its face value depending on prevailing market interest rates, investor demand and the return investors require at the time of the auction.
Interest earned on both securities is subject to a 10% withholding tax, according to the offer terms.
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September 30 Deadline for Investor Bids
The sale opened on September 24 and closes on September 30, 2026 at 10:00 am, with the auction scheduled for the same day. Settlement for successful investors will take place on October 5, 2026.
Retail investors can participate using non-competitive bids starting from KSh50,000, while the maximum for a non-competitive application is KSh50 million under the stated CSD account limits.
Investors seeking to submit competitive bids must place at least KSh2 million per CSD account for each tenor. Competitive bidders specify the yield they are willing to accept, while non-competitive investors accept the auction’s applicable pricing outcome.
LIVEKenya bond yields: Average yield 11.93% across 58 bonds · 16 OctSee yields →Participation requires an active DhowCSD account, with investors able to place Treasury bond bids digitally. Successful bidders can subsequently obtain their payment key and amount payable before completing settlement.
Bonds Can Be Sold Before Maturity
Investors do not necessarily have to hold the securities until 2034 or 2039.
Following settlement, the bonds can trade in the secondary market, generally in multiples of KSh50,000. This gives investors the option of selling their holdings before maturity, although the market value at the time of sale can be higher or lower than the original purchase price.
Bond prices typically move inversely to prevailing yields. If market interest rates rise after an investor buys a bond, the market price of that bond can decline. Conversely, falling market yields can increase the price investors are willing to pay for an existing fixed-coupon security.
The securities can also be used as collateral for loans from regulated financial institutions, giving government bonds an additional role beyond generating interest income.
What Investors Should Consider
The reopening gives investors access to relatively long-dated fixed-income securities with predetermined coupon payments, but the headline coupon alone should not drive an investment decision.
Investors should assess the auction price, effective yield, maturity period, tax treatment and their ability to remain invested through changes in interest rates.
For investors who may need to exit before maturity, secondary-market price risk is especially important. Those planning to hold the bonds to maturity should instead focus more closely on the effective purchase yield, expected coupon income and how the investment fits within their broader portfolio.
Sources: Central Bank of Kenya / Business Daily Africa / Kenya Times
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