Kenya’s Eurobonds yields edged higher, increasing by an average of 2.63 basis points, as global market sentiment shifted in response to a strengthening US dollar and evolving interest rate expectations, the Central Bank of Kenya (CBK) reported in its Weekly Bulletin.

Eurobonds are fixed income debt instruments issued in a currency other than the currency of the country or market in which they are issued, mostly denominated in a currency that is widely traded and accepted globally, like the US Dollar or the Euro. Generally, Eurobonds allow issuers to tap into a broader investor base allowing for diversification in capital sourcing.

CBK data shows that yields on benchmark issues moved unevenly: the 6-year 2031 bond rose 5 basis points, the 13-year 2034 bond climbed 5 basis points, and the 30-year 2048 bond added 4 basis points, while shorter-dated papers recorded marginal dips.

Analysts attribute the uptick to broader international developments. The US Dollar Index strengthened during the week, reflecting resilient US labour market data, with unemployment falling to 4.3 per cent, and persistent expectations around Federal Reserve policy.

Easing inflation in China and modest UK growth added to cautious investor positioning in emerging-market debt. International oil prices remained stable, with Murban crude closing at approximately Ksh8,886. per barrel, providing no major disruptive pressure.

The modest rise in Kenya’s Eurobond yields contrasted with declines in similar instruments from Angola and Côte d’Ivoire, highlighting mixed performance across African sovereign debt.

“In the international market, yields on Kenya’s Eurobonds increased by 2.63 basis points on average. Yields for Angola and for Côte d’Ivoire decreased,” read the CBK bulletin in part.

Meanwhile, Kenya is considering issuing more Eurobonds to pay off maturing debt and smooth its repayment schedule, Treasury Cs John Mbadi said on Wednesday.

The government issued two Eurobonds in February and October last year to buy back bonds that were coming due, after concerns about Kenya's ability to pay off a June 2024 bond sent yields sharply higher and hit the shilling currency.

"Whereas the redemption profile currently looks smooth, there is still room for additional liability management operations," finance minister John Mbadi told a news briefing.

Reports in recent weeks indicate that the government is considering issuing another Eurobond during this financial year, which runs to the end of June.

"It might be an ideal time to go to the market," Mbadi said, but added that a decision had not been made. Sales of emerging market debt hit record highs in January amid intense demand.

Kenya's government is also pressing ahead with a $1 billion debt-for-food swap, backed by the U.S. International Development Finance Corporation, which will allow it to replace expensive commercial debt with credit on concessional terms.

Mbadi said the ministry would release details in the coming months, but the debts to be retired could include expensive syndicated loans.

Domestic Markets

Kenya’s financial markets remained robust amid the external shifts. The money market stayed liquid, with commercial banks holding excess reserves of Ksh12.7 billion above the 3.25 per cent Cash Reserve Ratio requirement.

The Kenya Shilling Overnight Interbank Average Rate (KESONIA) eased to 8.78 per cent on February 12, 2026, from 8.99 per cent the previous week, while interbank transaction volumes rose sharply.

Government securities continued to attract strong demand. The February 12, 2026, Treasury bill auction drew bids worth Ksh74.1 billion, against an advertised amount of Ksh24 billion, achieving a 308.8 per cent performance rate. Rates on all tenors declined marginally.

The reopened 15-year and 25-year Treasury bonds on February 11, 2026, recorded an oversubscription of 427.5 per cent, with bids totalling Ksh213.8 billion against Ksh50 billion on offer.

Foreign exchange reserves stood at Ksh1.61 trillion as of February 12, 2026, equivalent to 5.4 months of import cover, while the Kenyan shilling remained stable against major currencies.

Equity markets also posted gains, with the NASI, NSE 25, and NSE 20 indices rising 5.29 per cent, 5.00 per cent, and 5.55 per cent, respectively. Equity turnover surged 63.59 per cent and shares traded jumped 80.79 per cent, signalling renewed investor confidence at the Nairobi Securities Exchange.

The jump in shares traded, is partly attributed to the recently introduced Ziidi Trader, a Safaricom-NSE backed platform integrated into M-Pesa, easing market access for retail investors.

Market Developments

Elswhere, Kenya’s Capital Markets Authority (CMA) approved new fund management licenses and additional collective investment schemes, a day after the regulator licensed six new market intermediaries.

The Authority approved Mema Asset Management Limited as a fund manager, allowing the firm to offer management services to both local and foreign investors, including corporate and high net worth individuals.

The CMA also greenlit CPF Asset Managers Limited to launch an additional sub-fund, CPF Multi-Asset Special Fund, under its already established collective investment scheme umbrella. The sub-fund will offer investors a diversified portfolio, with exposure to private equity, private debt, offshore investments, selected regional markets, global markets, and other locally unlisted securities, while targeting long-term capital growth and sustainable income.

Additionally, Dyer and Blair Investment Bank Limited has been cleared to register more sub-funds under its existing unit trust, the Dyer and Blair Unit Trust Scheme. These include the Dyer and Blair Fixed Income Fund (USD), Dyer and Blair Multi-Asset Strategy Special Fund, and the Dyer and Blair Global Multi Asset Strategy Special Fund (USD).

KenGen H1 2025/2026 Net Profit Falls 20%

Finally, KenGen PLC (NSE:$KEGN) recorded a 20% decline in after-tax profit to KES 4.2 billion for the six months ended December 31, 2025 compared to KES 5.3 billion recorded in a corresponding period in 2024, attributable to cost pressures, weak finance income and higher taxes.

Total revenue reached KES 30.1 billion, up 9.4% from KES 27.5 billion in HY 2024/2025, driven by improved plant availability, stronger operational performance and higher grid demand. During the review period, KenGen generated 7,805 GWh of electricity, up 8.3% from 7,210 GWh in December 2024. The power producer’s dispatch increased by 4% to 4,461 GWh while peak demand reached 2,439.06 MW.

Operating Expenses (OpEx) inched up by 7.4% to KES 19 billion mainly due to higher depreciation expenses arising from additional asset capitalization, as well as increased plant operating and steam costs. OpEx as a share of revenue stood at 63.2% in HY 2025/2026 as compared to 64.4% in HY 2024/2025.

Finance income plunged 37.3% to KES 1.53 billion from KES 2.45 billion in the previous period, attributable to lower interest rates. Finance costs declined by KES 125 million to KES 1.01 billion as the firm continued to reduce its debt levels.

The Nairobi Securities Exchange(NSE) – listed firm (NSE: $KEGN) posted a profit before tax of KES 7.6 billion, down 5.0% from KES 8 billion. A 26% year-on-year surge in income tax to KES 3.4 billion weighed on the company’s net earnings.