Minimum KSh 50k: CBK opens new KSh 15 billion Treasury bond switch auction

This story has significance for readers across Kenya and beyond.

- The Central Bank of Kenya opened a KSh 15 billion switch auction targeting holders of specific Treasury bills and an older bond

- Eligible investors can exchange their holdings for a ten-year Treasury bond offering a 12.28% coupon rate

- Bids close on August 24, 2026, with settlement scheduled two days later on August 26

The Central Bank of Kenya (CBK) has launched a KSh 15 billion switch auction.

CBK is inviting eligible investors to exchange holdings in select Treasury bills and a maturing Treasury bond for a longer-dated instrument offering a 12.28% coupon rate.

The CBK published a prospectus for the auction in its capacity as fiscal agent for the Republic of Kenya.

The auction runs from July 30, 2026, to August 24, 2026, with bids due by 10.00 am on the closing date and settlement confirmed for August 26, 2026.

Which Instruments Are Eligible for the Switch?

Investors holding unencumbered positions in three Treasury bill issues 2685/091, 2646/182 and 2574/364 as well as Treasury bond FXD1/2012/15 are eligible to participate.

The destination instrument is the ten-year Treasury bond FXD4/2019/010, which carries the 12.28% coupon and matures on November 12, 2029, giving it approximately 3.23 years remaining to maturity.

Participation is entirely voluntary. Investors may choose to switch part or all of their eligible holdings. Those with outstanding pledges on the source instruments must cancel them at least five days before the August 26 settlement date to qualify.

What is the bonds bid structure and pricing details?

The auction operates on a multi-price basis determined by the yield each bidder quotes.

For non-competitive bids, the minimum investment is KSh 50,000 and the maximum is KSh 50 million. Competitive bids require a minimum of KSh 2 million per Central Securities Depository (CSD) account per tenor.

The destination bond carries accrued interest of KSh 3.3736 per KSh 100 of face value. At the coupon rate of 12.28%, the clean price works out to approximately KSh 99.95, making the dirty price, inclusive of accrued interest, roughly KSh 103.33.

Withholding tax on the bond is set at 10%, computed on clean prices.

Coupon payments on the destination bond FXD4/2019/010 fall on November 16, 2026, and continue semi-annually through to the maturity date of November 12, 2029.

Auction results will be available to successful bidders through the DhowCSD Investor Portal or App under the Bids tab from Monday, August 24, 2026.

Any cash balance below the KSh 50,000 minimum investment threshold will be refunded to investors on the settlement date.

The CBK noted it reserves the right to accept applications in full, in part, or reject them entirely without stating reasons.

The bank also confirmed it will rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher.

Source: TUKO.co.ke

Reporting originally appeared via TUKO. Read the full source for additional context.