Kenya Treasury bonds · auction of 27 March 2017
Kenya bond auction, 27 March 2017: FXD2/2014/005 at 12.404%
The Central Bank of Kenya's bond auction dated 27 March 2017 was a primary issue of FXD2/2014/005 and FXD3/2013/005.
Bids came to KES 64.2bn against KES 30.0bn on offer (214% subscribed), and the Treasury accepted KES 24.9bn.
FXD2/2014/005 cleared at 12.404%, against a 11.934% coupon, with 2.2 years to maturity. Its previous sale, on 30 June 2014, priced at 13.357%, so the yield is down 95 basis points.
FXD3/2013/005 cleared at 11.817%, against a 11.952% coupon, with 1.6 years to maturity. Its previous sale, on 25 November 2013, priced at 11.952%, so the yield is down 13 basis points.
What this means for KES 100,000 of FXD2/2014/005
Worked from the published result · information, not advice
KES 5,072 every six months, after tax, for 2.2 years
At this auction KES 100,000 of face value cost about KES 102,276 (price 102.276 per 100), and the yield that implies is 12.40% a year. The coupon is 11.93%: KES 11,934 a year on KES 100,000 of face value, paid in two halves, KES 10,144 after 15% withholding tax.
Held to maturity (2019-06-17), that is about KES 22,551 in coupons, plus KES -2,276 loss between what you paid and the KES 100,000 repaid; roughly KES 20,275 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 |
|---|---|---|---|---|---|---|---|
| FXD2/2014/005 | primary | 12.404% | 11.934% | 2.2 | KES 31.33bn | KES 12.96bn | 102.276 |
| FXD3/2013/005 | primary | 11.817% | 11.952% | 1.6 | KES 32.92bn | KES 11.90bn | 104.298 |
Source: Central Bank of Kenya result notice · the PDF these figures were read from
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