Treasury has launched a Ksh30 billion buyback of a bond issued in 2023, in a bid to ease next year’s domestic debt pressure.
The bond carries a 14.228 per cent coupon, making it one of the pricier liabilities on the government’s books, with a total outstanding stock of Ksh76.5 billion as of this month.
The Central Bank of Kenya on Monday invited investors holding the FXD1/2023/003 bond to tender part or all of their positions for an early repurchase. The bond is to mature in May 2026, just about 5 months and three weeks from now.
“Treasury bonds bids must be submitted to the Central Bank electronically via CBK DhowCSD by 10am on Monday, November 17, 2025,” reads part of the notice.
The buyback, capped at Ksh30 billion, is voluntary, as the Treasury seeks to retire portions of the bond months ahead of schedule.
Experts say the move by the government is to flatten its near-term redemption curve and avoid a cash-flow pile-up in the next financial year.
Already, projections indicate that total public debt servicing costs will surpass Ksh1 trillion in interest payments alone during the 2025/2026 fiscal year.
Under the notice, investors will submit competitive bids based on preferred yields, with CBK applying a multi-price auction model to allocate accepted offers.
The indicative pricing table shows clean prices ranging from 100.5 at a 13 per cent yield to 103.6 at a 6.25 per cent yield, offering investors the potential to exit above par depending on market appetite.
According to CBK, investors with pledged holdings must release their lien positions five days before the auction to participate.
Successful bidders are to obtain details of successful bids from the DhowCSD Investor Portal on Monday, November 17, 2025.
Following the auction, investors will receive payments on Wednesday, November 19, according to CBK.
As of November 2025, the country's total public debt stands at approximately Ksh12.05 trillion. According to the Treasury, domestic debt makes up about 55.3 per cent of the total, or Ksh6.66 trillion.
