Long-Dated Appetite: CBK Accepts KSh 70.86B as 30-Year Bond Clears at 14.13%Long-Dated Appetite: CBK Accepts KSh 70.86B as 30-Year Bond Clears at 14.13%

The result matters because it shows what the government now pays to borrow for decades, and how much appetite remains for long-dated Kenyan debt. Bids totalled KSh 99.47B ($771M), almost twice the target, and the 30-year bond set the highest yield on offer.

What the CBK accepted

According to the CBK auction results, the sale covered two papers: the 15-year bond FXD3/2019/015 and the 30-year bond FXD1/2026/030.

The 30-year bond drew bids of KSh 62.40B ($484M), and the CBK accepted KSh 40.95B ($317M) at a weighted average yield of 14.13%. The 15-year bond attracted KSh 37.07B ($287M) in bids, with KSh 29.90B ($232M) accepted at a weighted average yield of 12.74%.

The CBK also published market weighted average rates of 14.17% for the 30-year bond and 12.87% for the 15-year bond, so accepted bids came in slightly below the market average on both papers.

Why investors chose the long bond

Demand leaned towards the newer 30-year paper, which offers the higher return for locking money away the longest. The gap between the two yields is about 1.39 percentage points, a premium that pension funds and insurers, which need long-dated assets, tend to find attractive.

The CBK accepted about 71.24% of the bids it received, so it chose not to take every shilling offered. That kept some pressure off yields while still exceeding its KSh 50B target by KSh 20.86B ($162M).

For the Treasury, taking more than it asked for eases near-term financing needs. For savers and institutions, a 14.13% return on a 30-year bond sits well above recent growth in the wider economy, as Mwenendo earlier reported when Kenya's growth slowed to 5.1%.

Borrowing costs in context

The auction follows a steady run of bond offers this year. As Mwenendo earlier reported, Kenya opened its September Treasury bond offer as part of the same borrowing programme.

Businesses watch these yields closely, because government bond rates set the floor for commercial loan pricing. Mwenendo has also tracked how private sector activity turned up in the Stanbic PMI, where higher costs remain a concern for firms.

The CBK has not published a comparison with earlier auctions in the results sheet, so whether yields have risen or fallen since the previous sale cannot be read from this release alone.