The Central Bank of Kenya (CBK) has realised a further Sh23.8 billion from the tap sale of four papers reopened to investors this month.
The tap sale that ran from Tuesday this week saw total investor bids of Sh25.1 billion against the advertised Sh20 billion target.
The bids were concentrated on the longer-maturity reopened five and 10-year papers where bids received at face value totalled Sh11.2 billion and Sh8.8 billion respectively.
The preference for long-tenure papers amid the issuance of two other papers with tenures of less than three years shows some success in CBK’s quest to drive investor interest toward bonds with long maturity periods.
CBK has struggled to drive investor interest into longer securities in the face of higher interest rates and an inverted yield curve where shorter-dated securities have yields surpassing those with longer durations.
Investors who bought into the paper’s tap sale have locked in returns of 17.1225 and 17.5862 percent for the reopened two and three-year bonds, and 18.1645 and 16.3924 percent for the reopened five and 10-year papers respectively.
Total nettings by the CBK from the tap sale and the paper’s reopening sale earlier this month stand at Sh84.8 billion against an initial target of Sh80 billion.
CBK has been issuing papers of varying maturity dates in an attempt to lower interest rates on government securities over the short to medium term.
Interest rates on the Treasuries have remained high despite CBK calling a peak to the costs in the face of revenue underperformance which has widened the fiscal deficit to Sh908.6 billion from Sh718.9 billion in the originally approved budget estimates.
