Kenya kicked off 2026 with a solid showing in the bond market, raising KSh 60.6 billion in its first reopening of the year as the Treasury continues to rely heavily on local investors while talks with the IMF keep external budget support in limbo.
The Central Bank of Kenya received bids worth KSh 71.5 billion for the reopening of the 20-year FXD1/2019/020 and the 25-year FXD1/2022/025, against an offer of KSh 60 billion. It accepted KSh 60.58 billion, giving the auction a performance rate of 119.2%. With no bonds maturing against this sale, the full amount went straight into fresh borrowing.
Under the FY2025/26 financing plan, the government aims to raise KSh 901.0 billion in net funding, with KSh 613.5 billion expected from domestic sources and KSh 287.4 billion from external lenders.
Investor appetite was skewed towards the longer end of the yield curve. The 25-year bond attracted KSh 48.18 billion in bids and took up KSh 40.34 billion of the accepted total, clearing at an average yield of 13.7561%. It carries a coupon of 14.1880% and has 21.8 years remaining to maturity. The 20-year paper drew KSh 23.36 billion in bids, of which KSh 20.24 billion was accepted at an average yield of 13.2623%. Its coupon stands at 12.8730%, with 13.2 years left to run.
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The January result extends a trend that defined the first half of FY2025/26. Between July and early December, the Treasury offered KSh 380 billion in bond reopenings, received KSh 1.09 trillion in bids and accepted KSh 585.2 billion. After subtracting KSh 119.8 billion in redemptions, net domestic borrowing from bonds had reached KSh 465.4 billion by early December. The January sale adds more breathing room to the government’s cash position at the start of the year.
Here is how bond issuance has played out so far in the current fiscal cycle (figures in KSh billions):
| Auction Date | Issues | Amount Offered | Bids Received | Amount Accepted | Redemptions | Net Borrowing |
|---|---|---|---|---|---|---|
| Jul 14, 2025 | FXD1/2018/020 & 025 | 50.00 | 76.90 | 66.70 | 0.00 | 66.70 |
| Aug 18, 2025 | IFB1/2018/015 & 019 | 90.00 | 323.40 | 95.00 | 94.60 | 0.40 |
| Aug 25, 2025 | IFB1/2018/015 & 019 (Tap) | 50.00 | 207.50 | 179.80 | 0.00 | 179.80 |
| Sep 8, 2025 | SDB1/2011/030 | 20.00 | 8.10 | 2.40 | 0.00 | 2.40 |
| Sep 22, 2025 | FXD1/2018/020 & 025 | 40.00 | 97.30 | 61.40 | 0.00 | 61.40 |
| Oct 20, 2025 | FXD1/2018/015 & 020 | 50.00 | 118.90 | 85.30 | 0.00 | 85.30 |
| Nov 10, 2025 | FXD1/2012/020 & FXD1/2022/015 | 40.00 | 92.90 | 52.83 | 0.00 | 52.83 |
| Nov 24, 2025 | FXD3/2019/015 & FXD1/2022/025 | 40.00 | 115.86 | 54.76 | 0.00 | 54.76 |
| Dec 8, 2025 | SDB1/2011/030 & FXD1/2021/025 | 40.00 | 53.13 | 47.11 | 25.20 | 21.91 |
| Jan 12, 2026 | FXD1/2019/020 & FXD1/2022/025 | 60.00 | 71.54 | 60.58 | 0.00 | 60.58 |
| Total | — | 440.00 | 1,165.56 | 645.81 | 119.84 | 525.88 |
With IMF programme negotiations still unresolved, Kenya has yet to receive any IMF funds in the current fiscal year. Other flexible external budget-support flows that usually follow IMF signalling have also failed to show up, leaving the domestic bond market to do most of the heavy lifting for now.
