The Central Bank of Kenya (CBK) has announced the reopening of two fixed-coupon Treasury bonds in October, FXD1/2018/015 (12.650%, due May 2033) and FXD1/2021/020 (13.444%, due July 2041), seeking KSh 50 billion for budgetary support.

In the first quarter of FY25/26, the CBK has already tapped markets aggressively:

By end-September, CBK had already raised well over KSh 400 billion domestically, covering more than 40% of the net domestic borrowing target for the fiscal year. The strategy shows a clear preference for reopening existing bonds across 15- to 25-year maturities, while the ultra-long 30-year paper has struggled to attract demand.

The Treasury’s reliance on front-loaded domestic issuance underscores pressure to finance redemptions while keeping borrowing costs in check.

Domestic debt service in FY25/26 is projected at KSh 1.3 trillion, part of an overall KSh 1.9 trillion debt service bill. While appetite for infrastructure bonds remains strong due to their tax-free status, conventional long bonds have also seen heavy take-up at yields near 14%.

The heavy reliance on the domestic market raises rollover risks, but CBK’