NSE chief executive Geoffrey Odundo monitors daily trading at the Nairobi Bourse/ The Nairobi Securities Exchange (NSE) sees a positive outlook for the private bond market in Kenya, urging investors to seize the opportunity to reap dividends.
Speaking at the official launch of trade on Kenya Mortgage Refinance Company PLC (KMRC) bond at the bourse, NSE CEO Geoffrey Odindo said all corporate bonds issued in the past two years have been oversubscribed.
“KMRC now adds onto the list of four private bonds including Acorn, Centum, Family Bank, East African Breweries Limited (EABL) that were well received in the market in past two years,” Odindo said.
The first tranche of KMRC’s Sh10.5 billion unsecured Medium-Term Note (MTN) was last month oversubscribed by 480 per cent.
The state-owned mortgage financier issued Sh1.4 billion in January but received offers worth Sh8.1 billion.
The proceeds raised will enable KMRC to blend its inventory of concessional funds and scale up operations, as it seeks to continue to refinance home loans and make them affordable and within reach for more Kenyans.
Cabinet Secretary National Treasury Ukur Yatani revealed that KRMC has successfully disbursed over Sh2 billion to the primary mortgage lenders to refinance mortgages while there’s an additional Sh7 billion which is currently being processed.
Yatani said that the firm is a collaboration between the government and the private sector to play a key role in the affordable housing pillar under the big four agenda.
“KRMC serves as a secure source of funding at attractive rates to increase the number of qualified borrowers and results in the expansion of the primary mortgage market and homeownership in Kenya,” Yatani said.
The firm is resolving the asset maturity mismatch that has been blamed for high-interest rates. The company mobilises long-term funds, which it then on- lends to participating lenders, which include commercial banks, savings and SACCOs and microfinance institutions.
The lenders are then able to match the maturities of the long-term credit available to them from KMRC with the home loans they offer to borrowers, resulting in lower interest rates, hence driving affordability.According to KMRC CEO Johnstone Oltetia, the bond is a strategic landmark issue, and the investor response demonstrates a vote of confidence in the company’s strategic direction.“Today, 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 said.He added that building a bankable and tenable long-term capital is at the core […]
