The Central Bank of Kenya (CBK) has opened a KSh10 billion Treasury bond switch auction for investors holding an existing 15-year government bond, giving them the option to move part or all of their holdings into a 10-year Treasury bond.
According to a prospectus issued by CBK on Friday, August 28, 2026, the switch covers Treasury bond FXD1/2013/015, which carries an 11.25 percent coupon rate and is due on February 7, 2028.
The other bond, FXD4/2019/010, has a 12.28 percent coupon rate and is due on November 12, 2029.
“Central Bank of Kenya, acting in its capacity as fiscal agent for the Republic of Kenya, invites bids for the above bonds whose terms and conditions are as follows,” CBK said.
CBK said the offer runs from August 27 to September 7, 2026, with bids required by 10 am on September 7. The auction and settlement dates are September 7 and September 9, respectively.
CBK Opens KSh10 Billion Treasury Bond Switch Auction With 12.28% Coupon
According to the CBK prospectus, only investors with unencumbered holdings in FXD1/2013/015 as at September 7, 2026, are eligible to participate.
“Participation in the auction is voluntary, and investors may opt to switch part or the entire holding (face value) in the bond,” the CBK said.
The destination bond, FXD4/2019/010, will be priced through a multi-price auction, with investors submitting their preferred yields.
Bond Pricing and Investment Requirements
CBK has provided a pricing table showing clean prices corresponding to yields ranging from 10 percent to 14 percent.
For instance, a 12 percent yield corresponds to a clean price of 100.6819, while a 12.28 percent yield corresponds to a clean price of 99.9571.
The bond attracts accrued interest of KSh3.8459 for every KSh100. The CBK said it would calculate withholding tax on the clean price.
The prospectus gives an example in which a quoted yield of 12.28 percent results in a clean price of KSh99.9571. After adding accrued interest of KSh3.8459, the resulting dirty price is KSh103.8030.
For investors participating through competitive bids, the minimum investment is KSh2 million per CSD account per tenor.
Meanwhile, non-competitive bids must be between KSh50,000 and KSh50 million.
The CBK said successful investors would receive allocation details through the DhowCSD Investor Portal or App after the auction.
“The Central Bank reserves the right to accept applications in full or part thereof or reject them in total without giving any reason,” the prospectus states.
Key Requirements and Investor Information
Investors with outstanding pledges on the source bond must cancel them at least five days before the switch settlement date to qualify.
The CBK has also indicated that the bonds may be reopened at a future date and will qualify for statutory liquidity ratio requirements for commercial banks and non-bank financial institutions.
The source bond carries semi-annual coupon payment dates, with payments scheduled for August 8, 2027, August 9, 2027, and February 7, 2028, according to the prospectus.
The CBK said investors seeking clarification can contact its Financial Markets Department or access the auction through commercial banks, investment banks, and stockbrokers.
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