The Central Bank of Kenya (CBK) has recorded unprecedented demand for infrastructure bonds after securing record subscriptions and acceptances in the latest reopening of three tax-free Treasury securities.
The reopening featured a record KSh150 billion offer, attracted bids worth KSh460.40 billion and resulted in acceptances totalling KSh312.03 billion. Demand therefore reached 307% of the amount offered.
CBK accepted more than double the initial offer, making the KSh312.03 billion allotment the largest recorded in the Treasury bond auction series reviewed. The KSh460.40 billion in bids also marked a new high.
Of the amount accepted, KSh118.14 billion will be used to refinance maturing debt, leaving the government with KSh193.89 billion in fresh borrowing.
The reopening covered three infrastructure bonds: IFB1/2019/016, maturing in October 2035; IFB1/2021/018, due in March 2039; and IFB1/2021/021, which matures in August 2042.
Demand was strong across all maturities. The 2035 bond attracted KSh166.22 billion in bids, of which KSh112.64 billion was accepted. The 2039 issue received KSh154.90 billion and secured KSh105.54 billion, while the longest-dated bond attracted KSh139.28 billion, with KSh93.85 billion accepted.
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The average accepted yields stood at 12.1960% for the 2035 bond, 12.6877% for the 2039 issue and 13.0520% for the 2042 bond.
All three securities were priced above their face value, with prices ranging from KSh101.8778 to KSh104.4961 for every KSh100 of face value.
Non-competitive bids accounted for KSh143.99 billion of the accepted amount, while competitive bids contributed KSh168.04 billion, indicating strong participation from investors across different bidding strategies.
The latest results underline the continued appeal of infrastructure bonds as a major source of domestic government financing. Their tax-free status has helped sustain investor demand, including for securities with maturities extending into the 2040s.
