The Kenyan government has successfully reopened a three-year Treasury bond, raising Sh34.3 billion to support various budgetary needs, including debt repayments and new borrowings.

This marks a strong start to the government's debt issuance plans for 2024, demonstrating continued investor confidence in the country's economic management.

"The bond attracted bids totalling Sh43.1 billion, representing a subscription rate of 107.69 per cent," said a statement from the Central Bank of Kenya (CBK).

This oversubscription, exceeding supply by 26 per cent, highlights investor appetite for Kenyan government debt.

The average accepted rate for the bond was 18.42 per cent, reflecting a slight premium compared to the offered market rate of 18.515 per cent.

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This indicates a competitive bidding process with investors willing to pay a small additional amount to secure the bond.

"The reopening sets the stage for the government's involvement in the domestic debt market, indicating strategic manoeuvres to manage its fiscal requirements amidst market complexities," the CBK statement added.

The Kenyan bond market has been active throughout 2024. In January, the government raised Sh55.5 billion through a combination of Treasury bills and bonds.

February saw a successful issuance of an eight-and-a-half-year Infrastructure Bond, garnering Sh70 billion. This latest reopening further strengthens the government's ability to meet its funding needs.

This fundraising effort comes as Kenya faces a significant Eurobond repayment obligation of Sh254.16 billion in 2024, including a $2 billion bond maturing in June.

To address this, the government plans to repurchase a substantial portion of the June 2024 Eurobond, aiming to enhance market confidence.

"It is anticipated that the government will repurchase at least half of the $2 billion Eurobond due in June 2024," sources familiar with the plan revealed.

This strategy is expected to mitigate potential market volatility associated with a large debt repayment.

The successful reopening of the three-year Treasury bond underscores investor confidence in Kenya's economic prospects and its ability to manage its debt burden.

This positive response lays a strong foundation for the government's continued debt issuance program throughout the year.