Treasury bill auction fails to raise enough capital for Sh104bn maturities

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The Treasury bill auction was unable to raise enough cash to pay the maturing short term-debts in April.

The Central Bank of Kenya accepted Sh84.93 billion in the past five T-bill auctions from its investors, while the maturing debts were already at Sh104.7 billion.   

Usually, funds to pay maturing debts from matching tenors are raised by the CBK.

The government received bids worth Sh87.04 billion for all the tenors at the auction and accepted bids worth Sh84.93 billion.

The debt also includes the Sh21 billion infrastructure bond that was received last week and will run for nine years. However, the government is planning to reduce borrowing this year.

The regulator also received bids worth Sh37.84 billion and only accepted Sh35.39 billion with an interest rate of Sh10.85 percent on the bond.

“These (auctions) would indicate they borrowed less than they paid out in short-term instruments. However, there was also a bond which they issued, which helped meet their borrowing targets and lengthen their maturing profits,” Said Sarah Wanga, AIB Capital head of research.

CBK received Sh17.90 billion bids from the April 30, the 91-day, 182-day, and the 364-day auctions but only accepted Sh15.66 billion.

Last week the regulator had a target of Sh4.00 billion and ended up receiving bids worth Sh4.47 billion, which was above their target.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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