Kenya Treasury bonds · auction of 20 June 2016
Kenya bond auction, 20 June 2016: FXD2/2016/002 at 11.508%
The Central Bank of Kenya's bond auction dated 20 June 2016 was a primary issue of FXD1/2012/015 and FXD2/2016/002.
Bids came to KES 50.8bn against KES 30.0bn on offer (169% subscribed), and the Treasury accepted KES 30.6bn.
FXD1/2012/015 cleared at 14.335%, against a 11.000% coupon, with 11.2 years to maturity.
FXD2/2016/002 cleared at 11.508%, against a 12.020% coupon, with 1.9 years to maturity. Its previous sale, on 23 May 2016, priced at 12.020%, so the yield is down 51 basis points.
What this means for KES 100,000 of FXD2/2016/002
Worked from the published result · information, not advice
KES 5,109 every six months, after tax, for 1.9 years
At this auction KES 100,000 of face value cost about KES 101,764 (price 101.764 per 100), and the yield that implies is 11.51% a year. The coupon is 12.02%: KES 12,020 a year on KES 100,000 of face value, paid in two halves, KES 10,217 after 15% withholding tax.
Held to maturity (2018-05-21), that is about KES 19,581 in coupons, plus KES -1,764 loss between what you paid and the KES 100,000 repaid; roughly KES 17,817 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 |
|---|---|---|---|---|---|---|---|
| FXD1/2012/015 | primary | 14.335% | 11.000% | 11.2 | KES 16.11bn | KES 4.90bn | 84.339 |
| FXD2/2016/002 | primary | 11.508% | 12.020% | 1.9 | KES 34.70bn | KES 25.72bn | 101.764 |
Source: Central Bank of Kenya result notice · the PDF these figures were read from
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