By Andrew Kariuki,

The Central Bank of Kenya (CBK) has issued a prospectus for the re-opening of long-term fixed coupon Treasury bonds, offering investors an opportunity to switch holdings from an existing shorter-term bond into a longer-dated instrument.

According to the prospectus, the switch auction will involve the conversion of the FXD1/2017/010 bond, which has approximately 1.2 years remaining to maturity, into the FXD1/2021/020 bond, which carries a much longer tenor of 15.22 years to maturity.

The source bond offers a coupon rate of 12.9660 percent and matures on July 19, 2027, while the destination bond carries a higher coupon rate of 13.4440 percent and matures on July 22, 2041.

CBK has set the total offer amount at Ksh10 billion, with the sale period running from April 23, 2026, to May 18, 2026. Bids must be submitted by 10:00 a.m. on May 18, 2026, with the auction scheduled for the same day and settlement expected on May 20, 2026.

The switch will be conducted through a multi-price auction method, allowing investors to receive allocations based on the yields they submit.

Participation in the auction is voluntary and restricted to investors holding the FXD1/2017/010 bond as at May 18, 2026. Investors may choose to switch either part or the full face value of their holdings.

The prospectus outlines that non-competitive bids will range between Ksh50,000 and Ksh50 million, while competitive bids will have a minimum threshold of Ksh2 million per CDS account per tenor.

CBK further noted that successful bidders will access allocation details through the DhowCSD platform on the auction date, with any unallocated funds below the minimum investment refunded after settlement.

The bond continues to qualify for statutory liquidity ratio requirements, making it attractive to banks and financial institutions. Additionally, investors may use government securities as collateral, although any pledged securities must be released at least five days before settlement to qualify for the switch.

The regulator also indicated that it retains the right to accept bids in full or in part, or reject them entirely without providing reasons.

The re-opening of these long-term bonds comes as the government seeks to manage its debt profile by extending maturities while offering investors stable, long-term returns in a rising yield environment.