Why CBK Seeks KSh 50b Loan from Kenyans after Rejecting KSh 200b in Oversubscribed August Bond
- The Central Bank of Kenya (CBK) left out over KSh 200 billion after receiving KSh 323 billion from investors for the 15-year and 19-year infrastructure bonds
- On Tuesday, August 19, after the closure of the bid, CBK floated a tap sale of the same bond, seeking KSh 50 billion
- Financial advisor Wakamiru Wakamiru explained to TUKO.co.ke why the banking regulator reopened the bond sale again despite rejecting the oversubscribed bids
Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
The Central Bank of Kenya (CBK) has invited bids from Kenyans for the recently closed infrastructure bond.
Source: Facebook
CBK seeks to raise additional KSh 50 billion in the tap sale of Treasury Bonds Issue Nos. IFB1/2018/015 and IFB1/2022/019 Dated 25/08/2025.
What is tap sale?
The regulator opened the sale from Tuesday, August 19, to Thursday, August 21, 2025.
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According to Cbonds, a tap sale or bond tap involves borrowers selling more bonds or short-term debt instruments from past issues.
CBK reopened the issues after seeking KSh 90 billion from the same bond issue, which closed on Monday, August 18.
The bank offered interest rates of 12.5% and 12.96% on each bond, respectively.
Why CBK opts for bond tap sale
The banking regulator received KSh 323 billion in bids from the offer but accepted KSh 95 billion.
CBK rejected over 200 billion from the oversubscribed infrastructure bond before reopening the tap sale.
In an exclusive interview with TUKO.co.ke, financial advisor Wakamiru Wakamiru explained that a tap sale is offered to allow investors who were unable to bid due to system glitches.
"In the case of the reopened 15-year and 19-year infrastructure bond, there was a system glitch. Some people reported bounced payments for allocated bonds in the previous offering of reopened bonds, and the tap sale allows them to invest," said Wakamiru.
Source: Twitter
Wakamiru explained that the National Treasury is determined to slash interest rates, a move that saw CBK reject the KSh 200 billion in the first offer.
He noted that had the regulator accepted the bids at the average rate of 12.96%, it would have meant that the government would pay more to investors.
"Regarding the strategy to reject bids and then do a tap sale, the Treasury, through the Public Debt Management Office (PDMO), has been very determined to bring interest rates down, which has been working for them, for now," he said.
Why CBK is seeking loans from Kenyans
The Central Bank of Kenya floats bond issues every month to raise funds for the budgetary support.
Treasury Cabinet Secretary (CS) John Mbadi said the financial year 2025/26 budget deficit will require support from the domestic and external lenders.
The parliament approved the KSh 4.29 trillion budget in June 2025, revising revenue collection by the Kenya Revenue Authority (KRA) to KSh 3.32 trillion.
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
