Nairobi, June 9 -- Companies with loan facilities pegged on Treasury bills are facing higher financing costs as interest rates on the securities continue to go up in weekly auctions.

Banks often price short- and medium-term loans to companies at the prevailing Treasury bill rate plus a premium. They do so to protect themselves from losing their margins when the cost of funds goes up as they compete with the Treasury for private sector deposits.

Listed companies such as EABL, Centum and Crown Paints are among those with shilling loans pegged on T-bills. They also have some facilities alternatively pegged on the Central Bank rate (CBR).

T-bill rates have been climbing since March after the start of the war between US-Israel and Iran trig...