The Government of Kenya has reopened two key fixed-income bonds – FXD3/2019/015 and FXD1/2022/025 – seeking KES 40 billion to support the FY 2025/26 budget.

This month’s auction lands at a pivotal moment: the State faces KES 212.5B in November maturities, even as liquidity strengthens following the USD 872M Eurobond inflow. The result? A market full of opportunity, but with a disciplined government unlikely to entertain aggressive bids.

Why This Auction Matters

• High November obligations are keeping investor interest elevated.

• Government liquidity is strong, moderating upward pressure on yields.

• T-bill demand is rising, especially for longer-dated paper.

• Revenue performance is ahead of target, reducing reliance on domestic borrowing.

Key Bond Details

• FXD3/2019/015 — 8.7 years | Coupon: 12.3400%

• FXD1/2022/025 — 21.9 years | Coupon: 14.1880%

• Auction Window: 11–19 November 2025

• Settlement: 24 November 2025

Rock Advisors’ Recommended Bidding Ranges

• FXD3/2019/015: 12.75% – 12.95%

• FXD1/2022/025: 13.87% – 14.07%

Our Take

With liquidity high and interbank rates easing, the government is well-positioned to keep yields contained. Smart investors will calibrate their bids carefully – assertive enough to secure allocation, but within market-aligned levels.

Rock Advisors continues to guide investors through Kenya’s evolving fixed-income landscape with clarity, precision, and strategic insight.

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Market Overview

The Government of Kenya, through the Central Bank of Kenya, has reopened two fixed-income bonds — FXD1/2018/015 and FXD1/2021/020 — targeting KES 50 billion to support the FY25/26 budget.

This auction comes at a time when the exchequer faces KES 165.40Bn in redemptions, down slightly from September’s KES 166.20Bn, giving the government more fiscal breathing room.

External inflows, including the anticipated KES 97Bn disbursement from the World Bank and remaining Eurobond proceeds, are expected to boost liquidity and limit investor bargaining power — likely narrowing yield deviations.

Auction Highlights

Fiscal Perspective

Kenya’s fiscal revenues surged 60.9% year-on-year in August 2025, hitting KES 709.67Bn, with domestic borrowing up 252.2%. This strong fiscal performance means the government is less likely to accept aggressive investor bids at this auction.

• Tax revenues grew steadily, reflecting resilient collections and stable economic activity.

• External financing remains slow but is expected to pick up.

• Domestic borrowing remains the dominant driver of revenue inflows.

T-Bill & Yield Curve Dynamics

• T-Bill performance rose to 118.94% in September — a signal of shifting investor appetite back to short-term papers.

• Interbank activity dropped 15.71% month-on-month, indicating stronger liquidity in the system.

• Yields are compressing across the curve, amplified by a 25bps cut in the Central Bank Rate to 9.25%.

• Real rates are under pressure as inflation inches up, dampening aggressive investor positioning.

Rock Advisors Market View

“Improved liquidity, lower redemption pressure, and external inflows point to a conservative issuance stance by the exchequer. Investors should adjust yield expectations accordingly.”

• FXD1/2018/015: Bid within 12.65% – 12.85%

• FXD1/2021/020: Bid within 13.37% – 13.57%

Rock Advisors expects narrow yield deviations and a measured investor response in this auction cycle.

Download full report here.

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