CMA says Sh1.4bn KMRC bond oversubscribed five times

NAIROBI, Kenya Feb 25-The Capital Markets Authority says the first tranche of Sh1.4 bn bond issued by the Kenya Mortgage Refinance Company (KMRC) in January has been oversubscribed more than five times after receiving applications worth Sh8.1 billion.

CMA, in a statement, lauded the performance of the first tranche of the unsecured Medium-Term Note (MTN) Programme noting that it “affirms the growing issuer and investor confidence in the bond market.”

CMA granted KMRC approval to issue an unsecured Sh10.5 billion MTN Programme in January 2022 which is being issued in tranches. The notes will also be listed at the Nairobi Securities Exchange (NSE).

“This is a major milestone which positions the capital markets as a source of funding to support productive economic activities such as delivery of affordable housing, which is one of the pillars of the National Big Four Agenda,” said CMA Chief Executive Officer, Wyckliffe Shamiah.

KMRC will use the proceeds for on-lending by extending long term loans to primary mortgage lenders to increase the availability of affordable housing finance in Kenya.

CMA also approved a Sh3.9 billion Medium Term Note Programme for Urban Housing Renewal Development Limited in December 2021, whose proceeds will be used to support an affordable housing project in Nairobi.

One of the constraints of the growth of housing in Kenya is the financing constraint with total mortgages in Kenya at under 30,000 as mortgages remain out of the reach of many Kenyans, while the houses units in the market are also relatively expensive.