Central Bank of Kenya Plans KSh 50 Billion Bond Sale Amid Investor Interest Surge

The Central Bank of Kenya (CBK) is set to raise KSh 50 billion in February through the sale of long-term Treasury Bonds, including a 15-year and a 25-year paper. The bonds, which carry coupon rates of 12.34% and 13.40%, will be available for subscription from January 22 to February 11, 2026, according to the CBK prospectus. The move underscores the bank’s ongoing efforts to balance investor demand with prudent domestic debt management.

Analysts anticipate strong interest in the 25-year bond, first introduced in 2018, due to its higher coupon rate despite the longer maturity. A recent bulletin from Standard Investment Bank (SIB) noted that investors are increasingly attracted to instruments that provide better long-term returns, signaling confidence in Kenya’s debt market even amid global uncertainties. The 15-year bond matures on 10 July 2034, while the 25-year paper is set to mature on 25 May 2043, providing options for different investment horizons.

Recent data from the CBK show that the previous week’s Treasury Bills auction saw a slowdown in demand, with KSh 18.21 billion accepted out of KSh 24 billion offered, as higher-cost bids were rejected. The three-month Treasury Bill emerged as the most sought-after, while the 91-day paper attracted the least interest. These patterns suggest that investors are carefully weighing short-term liquidity needs against long-term returns.

The CBK’s bond sale comes at a time when the government’s outstanding debt obligations are substantial. By early January 2026, total maturities up to January 2027 amounted to KSh 1,014.6 billion in Treasury Bills and KSh 320.58 billion in Treasury Bonds, with coupon payments pushing the total to nearly KSh 2 trillion. The next major bond maturity, due in May 2026, is KSh 66.9 billion, giving the CBK some flexibility to manage repayments efficiently while maintaining investor confidence.

Meanwhile, activity at the Nairobi Securities Exchange (NSE) remains lively, with a weekly turnover of US$22.8 million. Stanbic led trading despite a 1% dip in its share price, while the Absa New Gold ETF soared 81.4%, making it the top gainer. Investors are also closely monitoring upcoming financial results from East African Breweries Limited and January 2026 inflation data from KNBS, signaling that market watchers are bracing for volatility amid corporate developments and macroeconomic updates.

source: Business today