Investors oversubscribe KMRC affordable housing bond by three times

The Kenya Mortgage Refinance Company (KMRC) has listed a Sh3 billion sustainability bond on the Nairobi Securities Exchange (NSE) after investors backed the issuance.

Investors submitted bids worth Sh9.38 billion, representing a performance rate of over three times the amount originally put on offer by the institution.

A sustainability bond operates as a fundraising tool where investors lend capital to an organization for projects intended to create explicit social and environmental benefits.

For this specific issuance, KMRC will utilize the proceeds to support affordable and environmentally friendly residential housing developments.

The transaction marks the second issuance under the Sh10.5 billion Medium-Term Note (MTN) programme established by KMRC.

During its initial bond sale in 2022, the company raised Sh1.4 billion, which also drew strong interest from the market.

KMRC Chief Executive Officer, Johnstone Oltetia, noted during the listing ceremony that the transaction affirms the role of local capital markets in making homeownership more accessible, affordable, and sustainable.

Oltetia stated that the strong demand from investors indicates confidence in the mandate of promoting affordable homeownership while deepening the debt capital markets in Kenya.

According to management, the capital raised from the bond will be blended with concessional funding.

The blended funds are designated to refinance green affordable housing loans for climate-friendly homes, alongside social housing loans structured specifically to support women and low-income earners.

The transaction was arranged by NCBA Group, and market analysts note it reflects growing maturity and diversification within the local capital markets ecosystem.