Treasury building in Nairobi. file PHOTO | NMG
Summary
- The two-day tap sale came after the CBK only last week accepted 78.89 per cent of the bids offered by investors during the primary bonds sale period.
- Analysts had said the government was under no pressure for domestic borrowing and did not expect an immediate tap sale.
- The average yield for the five-year issue is 12.299 per cent and 13.336 per cent for the 20-year offer.
The Treasury has returned to the market with a surprise Sh8.5
billion reopened sale of this month’s five and 20-year Treasury bond
issues.
The two-day tap sale came after the Central
Bank of Kenya (CBK) only last week accepted 78.89 per cent of the bids
offered by investors during the primary bonds sale period.
Analysts had said the government was under no pressure for domestic borrowing and did not expect an immediate tap sale.
In
a notice published Tuesday, the Treasury fiscal agent had indicated
that it was offering eligible investors another opportunity to
participate in the sale closing Wednesday.
“Bids shall be priced at the weighted average rate of the
accepted bids for the Treasury Bond auction value dated March 26, 2017
and adjusted for accrued interest,” said CBK.
The average yield for the five-year issue is 12.299 per cent and 13.336 per cent for the 20-year offer.
The
primary bond sales which closed last week was oversubscribed by 128.46
per cent with the bids heavy on the five-year tenor, which was driven by
banks.
CBK accepted bids worth Sh31.55 billion in total out of Sh51.38 billion worth of bids which had been received.
Prior
to the CBK’s announcement, the 20-year bond offer was attractive and
analysts were expecting it to settle at 12.90 per cent.
“The
new 20-year issue remains attractive and we expect it to settle at a
support level of 12.90 per cent if no tap sale is offered,” said
analysts from Genghis Capital in a market note to investors.
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