Treasury Turns to the Long End as CBK Reopens Two Ultra-Long Bonds

The Central Bank of Kenya (CBK) has unveiled its ninth bond reopening for the 2025/26 financial year, aiming to raise KSh 40 billion through two lengthy tranches: the 30-year SDB1/2011/030 and the 25-year FXD1/2021/025.

The sale closes on 3 December and settles on 8 December, extending the government’s push toward long-dated borrowing as it looks to shore up stable funding ahead of substantial maturities later in the year. Treasury has stuck to its front-loaded strategy since July, leaning heavily on longer paper to secure predictable inflows and cut rollover exposure from short-term debt.

Investor appetite has helped shape this strategy. Pension schemes and insurers have been shifting into long duration through the second half of the fiscal year, strengthening demand for the far end of the curve.

This December reopening follows a strong November streak, capped by the 24 November auction where bids hit KSh 115.86 billion against a KSh 40 billion target, with KSh 54.76 billion taken up. That momentum pushed cumulative 2025/26 bond proceeds to roughly KSh 598 billion before the December tap, well ahead of typical mid-year volumes.

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The latest sale features two ultra-long bonds:

SDB1/2011/030 offers a 12 percent coupon and roughly 15.2 years left on the clock, while FXD1/2021/025 carries a 13.924 percent coupon with about 20.4 years outstanding. Recent auctions have been clearing just under market-weighted yields, so investors will be watching whether long-end pricing holds as liquidity shifts around the system.

How Treasury moves for the rest of the fiscal year will depend heavily on revenue performance and the debt redemption timetable.

FY25/26 Treasury Bond Auction Summary (KSh billions)