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The Central Bank of Kenya (CBK) is looking to raise Sh40 billion from investors to support government spending through the reopening of 15-year and 25-year Treasury bonds. These fixed-coupon bonds were previously issued and remain active in the market, now available to new investors.
“Central Bank of Kenya, acting as fiscal agent for the Republic of Kenya, invites bids for the above bonds,” CBK stated in its November bond prospectus.
The sale runs from November 11 to 19, 2025, with payments due by November 24, 2025. The 15-year bond offers an annual interest rate of 12.34%, while the 25-year bond pays 14.19%, with earnings subject to 10% withholding tax.
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Proceeds from the bond sale will be used for general budgetary support, reflecting the government’s continued reliance on domestic borrowing to fund fiscal obligations. According to the National Treasury, Kenya added about Sh250 billion to its debt between June and September, driven by a Sh340 billion increase in domestic debt, while external debt decreased by roughly Sh80 billion.
The bond issuance reflects a shift in the government’s financing strategy, in line with President William Ruto’s pledge to reduce reliance on expensive external loans that are vulnerable to forex fluctuations.
“Secondary trading for both bonds will start on November 24, allowing investors to buy and sell in multiples of Sh50,000 through CBK’s DhowCSD platform or licensed financial institutions,” the bank said.
CBK has also maintained a rediscounting window to provide liquidity support, letting bondholders access cash against their holdings at three percent above the prevailing market yield or coupon rate, whichever is higher.
Reopening these long-term bonds is part of CBK’s strategy to lengthen the maturity profile of domestic debt while offering investors stable, long-duration investment options amid easing inflation and stabilizing interest rates. The 15-year bond matures on July 10, 2034, and the 25-year bond matures on September 23, 2047.
Market data indicates strong demand for long-dated bonds from pension funds and insurance companies seeking predictable income, though retail investor participation remains low due to high minimum investment requirements.
The auction comes as the government seeks to balance fiscal consolidation with ongoing infrastructure and social sector spending, making Treasury bonds a key tool for domestic resource mobilization.
