The Kenya Mortgage Refinance Company PLC (KMRC) has launched a KSh 3.0 billion bond offer, its first capital markets fundraise in four years, targeting institutional and retail investors through a sustainability-labelled fixed rate note under its KSh 10.5 billion Medium-Term Note programme.
- •The offer opened on April 28, 2026 and closes May 12, with listing on the Nairobi Securities Exchange Fixed Income Securities Market scheduled for May 25, and the minimum investment threshold set at KSh 100,000.
- •The eight-year amortising note, structured with a Weighted Average Life of 5.11 years, constitutes Tranche 2 of the MTN programme approved by the Capital Markets Authority in January 2022.
- •Proceeds will be directed toward refinancing eligible green and social home loans under KMRC's Sustainable Finance Framework published in March 2026, and will be deployed alongside concessional funding from development finance institutions.
The issuance marks a return to commercial funding after KMRC exhausted the KSh 1.4 billion raised in its February 2022 debut, which attracted applications worth KSh 8.1 billion, a 480% oversubscription rate, at a coupon of 12.5% per annum. The company had planned a follow-on issuance in 2024 but deferred after the prevailing high-interest-rate environment threatened to raise funding costs to levels incompatible with its affordable housing mandate. It holds a national long-term credit rating of AA- from Global Credit Rating.
The Central Bank of Kenya has since cut its benchmark lending rate by 250 basis points to 8.75% over 16 months, narrowing the spread between commercial and concessional funding and opening a more viable window for KMRC's return.
The coupon rate has not been disclosed in the public notice, with pricing referenced to an applicable supplement. KMRC is understood to be targeting a tax-exempt status on the notes, a designation that would allow it to price at single-digit rates and reduce its overall cost of funds.
KMRC's loan book stood at KSh 19.6 billion at end-2025, up from KSh 11.9 billion a year earlier. The company has refinanced over 4,600 mortgages valued at approximately KSh 21.7 billion across 39 counties, though net interest income contracted from KSh 2.2 billion to KSh 1.7 billion during the same period as market rates declined.
The Tranche 2 offer is Kenya's third sustainability-linked bond instrument following Acorn Holdings' KSh 4.3 billion green bond in 2019 and Safaricom's KSh 40 billion sustainability bond in November 2025, which priced at 10.4% and was oversubscribed 177%.
NCBA Investment Bank is acting as Lead Arranger and Placing Agent, with Cygnum Capital as Financial Advisor, C&R Group as Paying, Registrar and Fiscal Agent, and KCB Kenya as the Receiving Bank. Ropat Trust Company is the Note Trustee, Mboya Wangongu and Waiyaki Advocates are Legal Counsel, and Grant Thornton LLP are Reporting Accountants.
