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Treasury Bonds & Bills

What is a Treasury bond?

Treasury Bonds are medium to long term debt instruments, usually longer than one
year issued by the government to raise money in local currency. Maturities of Treasury
Bonds that have been issued so far range from 1-30 years
.

What Types of Treasury Bonds Issued by Government of Kenya?
The types of Treasury bond may be defined by the purpose, interest rate
structure, maturity structure, and even by issuer. So far, the Government has
issued Fixed Coupon/Rate Bonds, Zero Coupon, Floating Rate, Infrastructure
(project specific), Restructuring/Special bonds, and Savings Development
bonds
.
· Most commonly issued bonds are fixed coupon bonds which have huge investor
demand. Treasury bonds are issued on monthly basis.
Fixed coupon Treasury bonds – Bear predetermined or market determined fixed
coupon (interest) which is paid semiannually (every 6 months) on the face value held
during the life of the bond. When bought at a discount (required yield1 higher than
coupon), investor benefits from discount (capital gain) which is critical for secondary
market trading and regular interest payment.
Infrastructure bonds – Proceeds are used to fund specific infrastructure/projects specified
in the prospectus. The coupon (interest) rate is fixed for the life of the bond.
Floating Rate Bonds – Pay semiannual interest based on a benchmark rate, for example
average rate of 91-days or 182-days Treasury bill plus some margin. They are on high
demand in high inflationary environment. They are no longer issued by the
Government since 2001, most corporate bodies issue them.

Zero Coupon Bonds – Do not have fixed interest and investor‟s return is only the discount
amount equivalent to the yield quoted. The bonds are mostly short term and a favorite
for commercial banks.

Click on Link Below to see Treasury Bond results

Treasury Bonds


source: tradingeconomics.com

What is a Treasury Bill?

A treasury bill is a paperless short-term borrowing instrument issued by the
Government through the Central Bank of Kenya (as a fiscal agent) to raise money on
short term basis – for a period of up to 1 year. Treasury bills are issued in maturities of
91, 182 and 364 days. Treasury bills are sold at a discounted price to reflect investor‟s
return and redeemed at face (par) value.

Click on Link below  to view T-Bills on offer :

https://www.centralbank.go.ke/bills-bonds/treasury-bills/

Treasury Bills on Offer

91-DAY

Issue Number: 2317/091 Auction Date 16th May 2019 Previous Average Interest Rate:7.196 Value Date: 20th May 2019

182-DAY

Issue Number: 2290/182 Auction Date: 16th May 2019 :Previous Average Interest Rate 7.897 Value Dated: 20th May 2019

364-DAY

Issue Number: 2234/364 Auction Date: 16th May 2019 Previous Average Interest Rate: 9.316 Value Dated: 20th May 2019

 
 
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