NAIROBI, Kenya Dec 2 – The Capital Markets Authority (CMA) has approved the issuance of an Sh3.9 billion corporate bond for Urban Housing Renewal Development Limited in an effort meant to facilitate affordable housing.
The bond would be issued through the Medium-Term Note Programme to support a housing project in Pangani, Nairobi meant to comprise 1,562 housing units.
CMA Chief Executive, Wyckliffe Shamiah commented that the issuance of the bond would support productive economic activities in the country, such as the delivery of affordable housing, which he termed as “one of the key pillars of the National Big Four Agenda’’
“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,” Shamiah said in a statement.
The authority had approved the issuance of an Shs.4 billion medium-term note to Centum Investments Company Plc and Shs.8 billion to Family Bank which recorded an oversubscription of 147 percent.
Shamiah added that the success of the housing project was to be used as a model to structure financing to facilitate the rollout of more affordable houses for which there was a growing demand across the country.
“Innovative capital market financing through corporate bonds are strategies to deliver relatively cheaper houses to Kenyans. The oversubscription of the EABL and Family Bank corporate bond issues by 245 percent and 147 percent, respectively, indicates enhanced investor confidence and growing liquidity in the market,” he noted.