The Central Bank of Kenya (CBK) has announced a new KSh 50 billion Treasury bond offer, giving Kenyans another opportunity to invest in government securities and earn interest of up to 12.857% annually.
The offer targets both individual and institutional investors as the government seeks additional funds to finance its budgetary requirements.
According to a prospectus dated November 9, 2026, the CBK is reopening two existing Treasury bonds with coupon rates of 12.857% and 12.5%. However, the actual returns investors receive will depend on the prices at which they purchase the securities.
Investors have until Wednesday, November 18, at 10am to submit their applications.
CBK Opens KSh 50 Billion Treasury Bond Investment Opportunity
The latest offer involves two reopened Treasury bonds, meaning the government is raising additional funds through securities that were previously issued.
Investors who purchase the bonds will receive interest payments at the contractual coupon rates attached to the securities, subject to the applicable investment terms.
The first bond, FXD1/2019/015, has approximately 7.3 years remaining before maturity. It carries an annual coupon rate of 12.857% and will mature on January 9, 2034.
The second bond, SDB1/2011/030, has approximately 14.3 years remaining before maturity. It offers an annual coupon rate of 12.5% and is scheduled to mature on January 21, 2041.
Both securities attract a 10% withholding tax on interest payments.
Kenyans Can Invest From KSh 50,000
The CBK has set the minimum investment for non-competitive bids at KSh 50,000, allowing individual investors to participate without committing millions of shillings.
Non-competitive applications are capped at KSh 50 million per investor account.
Investors submitting competitive bids must invest at least KSh 2 million per Central Securities Depository (CSD) account for each bond category.
Participation is restricted to investors with active DhowCSD accounts, the CBK’s digital platform for accessing and managing government securities.
The auction will use a multi-price bidding system. Successful competitive bidders will receive allocations based on the yields they offer rather than a single uniform price.
The CBK also reserves the right to accept applications fully or partially, allocate securities on a pro-rata basis or reject applications.
CBK Announces Key Dates for Treasury Bond Auction
The prospectus outlines several dates investors need to observe before participating in the offer.
The application period closes on Wednesday, November 18, 2026, at 10am.
Successful applicants will receive payment keys and details of the amounts payable through the DhowCSD Investor Portal or mobile application on Friday, November 20.
Settlement is scheduled for Monday, November 23, 2026. Secondary trading is also expected to begin on the same day, with the bonds listed on the Nairobi Securities Exchange (NSE).
This will allow investors to sell their securities to other market participants before maturity, subject to prevailing market prices and trading conditions.
Kenyans Can Use Treasury Bonds as Loan Security
The CBK prospectus allows investors to pledge their Treasury bonds as collateral when seeking credit from regulated financial institutions.
This arrangement gives bondholders an opportunity to access loans without necessarily selling their investments.
However, investors must comply with the lending institution’s requirements and the applicable conditions governing pledged securities.
The CBK also provides a rediscounting facility for investors who need to access their money before the bonds mature.
The facility is considered a last resort because it attracts a rate set three percentage points above the prevailing market yield or the bond’s coupon rate, whichever is higher.
Both securities also qualify towards statutory liquidity ratio requirements for commercial banks and non-bank financial institutions under the Banking Act.
Why the 12.857% Treasury Bond Rate May Not Be Your Actual Return
Despite the advertised interest rates, investors should understand that a bond’s coupon rate is different from its actual investment yield.
Treasury bonds can be purchased above, below or at their face value, depending on market conditions and the auction price.
An investor who purchases a bond above its face value will generally earn a lower effective yield than the coupon rate. Conversely, buying below face value can increase the effective yield, assuming the bond is held to maturity.
Investors who sell before maturity also risk making a loss if market interest rates rise and bond prices decline.
The 10% withholding tax on interest payments must also be considered when calculating the net return.
CBK’s Latest Bond Offer Follows Strong Demand in September
The KSh 50 billion offer follows strong investor demand during an earlier Treasury bond auction in September.
During that auction, investors submitted bids worth KSh 68.19 billion against a target of KSh 60 billion. However, the CBK accepted KSh 47.75 billion.
The latest reopening provides the government with another source of domestic borrowing while giving investors an opportunity to earn interest through government securities.
Investors are advised to read the full CBK prospectus before applying, paying particular attention to the pricing tables, taxation, interest payment dates and conditions governing the sale of bonds before maturity.
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