NAIROBI, Aug 20 – Kenya Treasury bond switch investors have a new opportunity to exchange eligible Treasury bills and an existing Treasury bond for a new government bond worth a total of KSh75 billion.
The Central Bank of Kenya (CBK) has invited eligible investors to take part in the voluntary switch, which allows them to exchange all or part of their holdings for Treasury bond FXD4/2019/010.
The switch covers Treasury bills with issue numbers 2685/091, 2646/182 and 2574/364, as well as Treasury bond FXD1/2012/015. Only investors holding unencumbered amounts of the eligible securities as of August 24, 2026, can participate.
The CBK has assigned KSh15 billion to each of the five securities listed in the prospectus, bringing the total value of the switch to KSh75 billion.
Investors can exchange either part or the full face value of their eligible holdings. The auction will use a multi-price system. Competitive bids require a minimum of KSh2 million per Central Securities Depository (CSD) account for each tenor, while non-competitive bids must be between KSh50,000 and KSh50 million.
The three Treasury bills will mature on September 7, 2026. The FXD1/2012/015 Treasury bond will mature on September 6, 2027, and carries an 11% coupon rate.
The Treasury bills do not have coupon rates and are subject to a 15% withholding tax. The existing Treasury bond is subject to a 10% withholding tax.
The new FXD4/2019/010 Treasury bond carries a 12.28% coupon rate and will mature on November 12, 2029. It is also subject to a 10% withholding tax. Its price will be determined through the multi-price auction based on the yield submitted by investors.
The offer period runs from July 30 to August 24, 2026, with bids closing at 10 a.m. on August 24. Settlement is scheduled for August 26.
Successful investors will be able to view their allocation details through the DhowCSD Investor Portal or App under the Bids tab. The CBK can accept applications in full or in part or reject them.
After settlement, allocated amounts will be added to investors’ portfolios. Any remaining cash below the KSh50,000 minimum investment amount will be refunded on August 26.
The CBK may also rediscount the bonds as a last resort at 3% above the prevailing market yield or coupon rate, whichever is higher. Investors seeking rediscounting must submit their instructions through the DhowCSD Investor Portal or App by selecting the Instructions tab, then Create New and Rediscount.
The new bond may be reopened at a later date. It also qualifies for statutory liquidity ratio requirements for commercial banks and non-bank financial institutions under the Banking Act, Cap 488.
Investors with outstanding pledges on eligible holdings must cancel them five days before the switch settlement date to qualify for the offer. The CBK has advised investors seeking more information to contact its Financial Markets Department, branches and currency centres, commercial banks, investment banks or stockbrokers.
The FXD1/2012/015 bond has coupon payment dates on September 7, 2026, March 8, 2027 and September 6, 2027. For the FXD4/2019/010 bond, coupon payments are scheduled for November 16, 2026; May 17 and November 15, 2027; May 15 and November 13, 2028; May 14, 2029; and November 12, 2029.
The CBK prospectus sets out the rules for the voluntary switch, including investor eligibility, bidding, allocation, settlement and liquidity arrangements.
