Kenya Treasury bonds · auction of 29 August 2011
Kenya bond auction, 29 August 2011: FXD2/2010/005 at 13.887%
The Central Bank of Kenya's bond auction dated 29 August 2011 was a re-opening of FXD2/2010/005 and SDB1/2011/030.
Bids came to KES 8.7bn against KES 10.0bn on offer (87% subscribed), and the Treasury accepted KES 0.0bn.
FXD2/2010/005 cleared at 13.887%, against a 6.671% coupon, with 4.2 years to maturity. Its previous sale, on 27 June 2011, priced at 12.529%, so the yield is up 136 basis points.
SDB1/2011/030 cleared at 16.397%, against a 12.000% coupon, with 29.4 years to maturity. Its previous sale, on 28 March 2011, priced at 8.501%, so the yield is up 790 basis points.
What this means for KES 100,000 of FXD2/2010/005
Worked from the published result · information, not advice
KES 2,835 every six months, after tax, for 4.2 years
At this auction KES 100,000 of face value cost about KES 77,378 (price 77.378 per 100), and the yield that implies is 13.89% a year. The coupon is 6.67%: KES 6,671 a year on KES 100,000 of face value, paid in two halves, KES 5,670 after 15% withholding tax.
Held to maturity (2015-11-23), that is about KES 24,017 in coupons, plus KES 22,622 gain between what you paid and the KES 100,000 repaid; roughly KES 46,639 in all after tax.
Sold before maturity, the price moves with rates: if yields rise, the bond is worth less; if they fall, more. The Central Bank’s minimum bid is KES 50,000. Compare with bills, funds and deposits after tax →
Results
By bond
| Bond | Sale | Yield | Coupon | Years left | Bids | Accepted | Price /100 |
|---|---|---|---|---|---|---|---|
| FXD2/2010/005 | reopening | 13.887% | 6.671% | 4.2 | KES 4.15bn | — | 77.378 |
| SDB1/2011/030 | reopening | 16.397% | 12.000% | 29.4 | KES 4.55bn | — | 73.441 |
Source: Central Bank of Kenya result notice · the PDF these figures were read from
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