Treasury Cabinet Secretary Henry Rotich. [Photo/the-star.co.ke]This month’s five-year bond issue has made the Treasury go back to the market with a Sh16.5 billion tap sale. On Tuesday the Central Bank of Kenya (CBK) said it was offering investors another opportunity to participate in the reopened issue that will close next week on November 2.CBK in an update said, “Bids shall be priced at the weighted average rate of the accepted bids for the bond auction value dated October 23, 2017 and adjusted for accrued interest.”Bids will be allocated on a first-come-first-served basis with an average yield rate of 12.517 per annum.At the auction last week, the overall subscription rate was at 66.9 per cent, with the market average bid rate coming in at 12.6 per cent, slightly above accepted rate of 12.5 per cent.As was the case with previous bond auctions for this fiscal year—in which the government only accepted 57.8 per cent of total bids on average and shunned expensive ones, accepting only Sh13.5 billion out of the Sh20.1 billion offers. This translated to an acceptance rate of 67.3 per cent.Market analysts expect the government to continue rejecting expensive bids on government securities while keeping interest rates low to prevent further crowding out of the private sector as banks channel more funds towards government securities.The government is also behind its domestic borrowing target, and low revenue collection is expected from the Kenya Revenue Authority (KRA).

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