The Treasury has missed the Sh50 billion target for the five-year bond highlighting poor performance of government borrowing in the pandemic era amid underperforming tax collection.
Central Bank of Kenya (CBK) data shows the bond sale tapped Sh20.78 billion from investors in new borrowing after bids worth Sh34.53 billion were received.
The yields on the bond popped up by more than 81 basis points to a high of 11.667 per cent compared to previous 10.85 per cent offered on nine-year bonds of Sh21 billion and Sh60 billion in the last month.
The bonds were oversubscribed to Sh37.84 billion and Sh68.41 billion respectively.
Genghis Capital senior analyst Churchill Ogutu said the under subscription is a rare occurrence and could be much of supply issue than demand, with the sale period too short for investors to fill up the bids on offer.