Kenya Mortgage Refinance Company (KMRC) corporate bond made its maiden pitch on the Nairobi Securities Exchange yesterday, unveiling a new era in the local market.

Speaking during the bell-ringing ceremony at the bourse yesterday, Capital Markets Authority (CMA) chief executive officer Wyckliffe Shamiah said the overwhelming 480 per cent subscription on the first tranche signals investor confidence in the sector.

“This is a major milestone which positions the capital markets as a source of funding to support productive economic activities such as the delivery of affordable housing, which is one of the pillars of the National Big Four Agenda. It affirms the growing issuer and investor confidence in the bond market,” said Shamiah.

Cash to blend inventory

The first tranche of the Medium-Term Note programme realised applications worth Sh8 billion against a target of Sh1.4 billion. Proceeds will enable KMRC to blend its inventory of concessional funds and scale up operations, as it seeks to continue refinancing home loans and make them affordable and within reach.

Chief executive Johnstone Oltetia said the bond issue is a confidence vote in the strategy and business model of the issuer to increase homeownership and transform the country’s housing sector.

“We firmly establish our entry into the local capital markets for the core purpose of sustainably raising long-term funding for the Company’s operations,” Oltetia stated, adding, “building a bankable and tenable long-term capital is at the core of our Strategic Plan and objective to make housing affordable for our people.”

“This is a major milestone not only for the Company but for the exchange as well, given its unique structure and the target sector it will support. It is also the first issuance for the year 2022,” said NSE chair Kiprono Kittony.

KMRC is resolving the asset maturity mismatch blamed for high-interest rates on home loans in Kenya by mobilising long-term funds, which it then on-lends to key lenders who include commercial banks and SACCOs.