The Central Bank of Kenya has published results of a ten-year Treasury switch auction, dated November 11, 2026, in which KSh3.89 billion of older government securities were exchanged for a bond maturing November 12, 2029. Bids of KSh3.79 billion met 37.9 percent of the KSh10 billion on offer, at a weighted average yield of 11.24 percent.
A switch auction lets investors exchange existing government securities for a new bond, rather than providing fresh cash to the government. In this case, holders of three Treasury bills and one older Treasury bond handed in their securities in return for the destination bond, FXD4/2019/010. The source securities totalled KSh3.89 billion, of which most was a KSh3.07 billion Treasury bill maturing under issue 2696/091.
The destination bond is a 10-year issue with three years left to maturity, and it carries a coupon of 12.28 percent. It falls due on November 12, 2029. The bank’s table, signed by David Luusa, Director, Financial Markets, shows the bond was priced at KSh108.56 per KSh100 at the average yield, a premium that reflects a coupon set above the market rate.
Demand was modest against the KSh10 billion on offer. Bids at cost totalled KSh3.79 billion, a performance rate of 37.9 percent, and the bid-to-cover ratio was 1.00. Of the amount accepted, KSh843.26 million came from competitive bids, where investors name the yield they will accept, and KSh2.94 billion from non-competitive bids, which take the average yield set at the auction.
The yield of 11.24 percent for a three-year remaining bond is lower than the rates on the longer bonds sold a few days earlier. The bank’s November 4 results showed a 15-year bond accepted at 12.74 percent and a 30-year bond at 14.13 percent. The gap across maturities suggests investors demand more return for lending to the government for longer.
Switch auctions are a debt management tool. They allow the government to move debt from securities that are close to maturity, such as Treasury bills, into a bond with a later maturity date. That can spread out repayments and reduce the pressure of large sums falling due at once, although the switch does not reduce the total amount owed.
The table shows KSh3.89 billion of securities surrendered against KSh3.79 billion of new bonds accepted, a gap of about KSh105 million. The bank’s table does not explain the difference, which may reflect how the switch is settled or priced. The figure should be checked against the CBK’s full auction notice before it is reported as a final number.
The bank also said the prospectus for the bonds it plans to issue in November 2026 would give their tenor, amounts, coupon rates and issue terms. Those details, along with the next auction results, will show whether the government continues to manage its debt through switches and how yields move across different maturities.
