The Central Bank of Kenya (CBK) has turned to two familiar 15- and 20-year Treasury bonds in its Sh50 billion October issuance, hoping to ride the demand they attracted last month to hit its target.
A prospectus for the October bond sale shows that for the second successive month, the State is reopening a 15-year bond first issued in July 2019 at a rate of 12.34 percent, and a 20-year bond that was initially sold in April 2019 at 12.873 percent.
The two papers have each been reopened five times in the last 12 months, placing them among the go-to bonds for the CBK in its recent domestic borrowing programme for the government.
The 20-year paper was reopened in January, March, May, July and September this year, while the 15-year paper was brought back to market in November 2025, and in February, March, May and September 2026.
By reopening these bonds repeatedly, their outstanding amounts have climbed sharply, raising the risk of refinancing pressure when they will be scheduled for redemption in the future.
The 15-year bond started out with a face value of Sh50.6 billion in 2019, but this has now ballooned to Sh161 billion, while the outstanding amount on the 20-year paper has climbed from Sh9 billion at first issuance to Sh209.8 billion currently.
The reopenings done earlier this month were in two separate sales each targeting Sh60 billion, where the bonds were sold alongside a pair of 30-year papers.
The 15-year paper had its auction on September 2 alongside a 30-year paper from 2011. The 15-year attracted bids of Sh57.1 billion, compared to Sh11.1 billion for the 30-year, with the CBK taking up a total of Sh47.7 billion on the sale.
On September 16, the 20-year paper was auctioned alongside another 30-year bond that was initially floated in March 2026. Bids on the 20-year bond stood at Sh43.8 billion, compared to Sh37.6 billion for the 30-year, with a total accepted amount of Sh50.2 billion on the two papers.
The CBK is now anticipating that the demand seen earlier this month on the two bonds will carry forward into the October sale.
The government’s fiscal agent has been looking to lock in as much borrowing as possible in the early months of the fiscal year, with analysts saying that this will help in managing interest rate expectations later in the year when the country will be closing in on a general election.
Net borrowing in the first two months of the fiscal year stood at Sh406 billion, as per CBK data, equivalent to 41 percent of the full year target of Sh987.4 billion.
With the additional borrowing of Sh97.92 billion in September, the net borrowing has now hit 51 percent of the year’s target, given that there were no bond maturities falling due this month and Treasury bill maturities have generally been refinanced through rollovers.
The CBK has also been refinancing the government’s domestic debt through monthly switch bond sales, where holders of securities that are due to mature soon are offered an exclusive chance to transfer their investment into longer dated alternatives.
The October switch sale opened on Thursday, targeting Sh10 billion from a three-year bond that was issued in January 2024 at a rate of 18.3854 percent-maturing in January 2027- and a 15-year paper from 2013 which pays 12 percent annually and matures in April 2028.
Holders of these bonds have been given the chance to transfer part of their capital into another 15-year bond that was sold in May 2018 at 12.65 percent, with a maturity date in May 2033.
In the most recent swap sale on September 7, investors moved Sh11 billion from a 15-year bond from 2013 into a 10-year security that matures in November 2029.