Treasury Bond Switch Auction Kenya: September 2026 CBK Result

The Central Bank of Kenya’s latest Treasury bond switch auction attracted bids worth KES 13.52 billion and accepted about KES 11.02 billion. The destination bond, FXD4/2019/010, cleared at a weighted average accepted yield of 11.1398%.

A switch auction can look like an ordinary bond auction because it still publishes yields, bids and prices. But the purpose is different: eligible investors exchange a specified existing government security for another Treasury bond rather than simply treating the transaction as a new cash investment. That makes the latest result useful both as a market-rate snapshot and as an example of how Kenya manages government debt maturities.

September 2026 Treasury bond switch result

Measure	9 Sep 2026 switch	26 Aug 2026 switch*
Destination bond	FXD4/2019/010	FXD4/2019/010
Amount offered	KES 10.00bn	KES 15.00bn
Bids received	KES 13.52bn	KES 22.58bn
Amount accepted	KES 11.02bn	KES 22.51bn
Accepted weighted average yield	11.1398%	11.2391%
Price per KES 100	106.7968	106.0845
Coupon	12.2800%	12.2800%

*The August switch involved a different set of source securities, so this is a market comparison, not a like-for-like measure of investor behaviour.

The accepted yield was about 9.93 basis points lower than the 26 August switch result, while the quoted price per KES 100 was about KES 0.71 higher. That inverse movement is a useful bond lesson: when the required yield on the same fixed-coupon bond falls, its price generally rises.

What is a Treasury bond switch auction?

In a switch auction, CBK identifies a source security that eligible investors can exchange and a destination bond they receive in return under the auction terms. For the 9 September switch, the source was FXD1/2013/015 and the destination was FXD4/2019/010.

From the government’s side, switches can help reshape the maturity profile of outstanding debt. From an investor’s side, the transaction changes the security held — including its maturity, coupon schedule, market price and yield characteristics. The exact eligibility and settlement mechanics are set out in the official CBK prospectus for each switch.

This is different from a standard Treasury Bond auction, where investors bid for bonds being offered by the government, and from a Treasury Bill auction, which covers the shorter 91, 182 and 364-day government securities.

Why is the bond priced above KES 100?

FXD4/2019/010 carries a fixed coupon of 12.28%, while the latest accepted market yield was 11.1398%. The reported average price was therefore above face value at KES 106.7968 per KES 100.

That does not mean an investor is receiving a 12.28% return plus a gain. The coupon and the yield answer different questions. The coupon determines the bond’s scheduled interest payments on face value. Yield incorporates the price paid and remaining cash flows, making it the more useful number when comparing the market pricing of bonds with different coupons and prices.

Amka takeaway: for reopened or switched bonds, comparing coupon rates alone can be misleading. Look at the accepted yield, price and remaining maturity together.

What does 135.24% auction performance mean?

CBK offered KES 10 billion and received bids at cost of KES 13.524 billion, producing a reported performance rate of 135.24%. CBK accepted KES 11.020 billion, including KES 10.304 billion of competitive bids and KES 716.59 million of non-competitive bids.

Strong subscription tells us that submitted demand exceeded the amount initially offered. It does not by itself prove that the bond is attractive for every investor or predict where yields will move next. Bond demand can reflect many considerations, including liquidity, portfolio constraints, prevailing rates and the specific terms of the switch.

How does this fit into Kenya’s current rate picture?

The latest Treasury Bill reference rates are 8.7674% for 91 days, 8.9296% for 182 days and 9.0665% for 364 days ahead of the 17 September auction. The 11.1398% switch-bond yield is higher, but the instruments are not directly interchangeable: the destination bond matures in November 2029 and carries market-price risk if sold before maturity.

That is why a longer-term bond yield should not simply be read as “better” than a shorter T-Bill rate. Time to maturity, price movement, coupon cash flows, tax treatment and liquidity all matter.

What to check before comparing Treasury Bonds

Start with the remaining maturity, not only the original tenor. FXD4/2019/010 was originally a 10-year bond but had about 3.20 years remaining at the September switch. Then check whether the figure you are reading is the coupon or the market yield, whether the bond is trading above or below face value, and whether the auction is a new issue, reopening, tap sale or switch.

Amka’s Treasury Bonds Kenya page keeps the latest official bond snapshot in one place, while our government securities beginner guide explains the shorter Treasury Bill side of the market.

Sources

Important: This article is educational and comparative information only. It is not personalised financial advice or a recommendation. Government-security yields, prices, auction terms and tax treatment can change; verify the latest CBK documents before acting.