Kenya Mortgage Refinance Company has raised KSh 3.0 billion through its second sustainability bond after attracting applications worth KSh 9.38 billion, recording a 312.8% oversubscription rate in the mortgage refinancer's first return to the capital markets since 2022.
- •The eight-year amortising note, Tranche 2 of KMRC's KSh 10.5 billion Medium-Term Note programme, priced at a coupon of 12.2% per annum payable semi-annually.
- •KMRC accepted the full KSh 3.0 billion target with no green-shoe option, leaving KSh 6.38 billion in unallocated bids.
- •The 12.2% coupon is 30 basis points below the Tranche 1 rate and above Safaricom's 10.4% sustainability bond issued in November 2025, which drew a 177% oversubscription on a KSh 15.0 billion target.
The bond carries a Weighted Average Life of 5.10 years and will amortise annually, with the first redemption commencing November 2026. Notes will be credited to CDS accounts on 22 May 2026 and listed on the Nairobi Securities Exchange Fixed Income Securities Market on 25 May.
All proceeds will be deployed toward refinancing eligible green and social home loans under KMRC's Sustainable Finance Framework dated March 2026, blended with concessional funding from the World Bank and the African Development Bank.
The 312.8% performance rate, while strong, compares with the 480% oversubscription on Tranche 1 in February 2022, when KMRC raised KSh 1.4 billion against KSh 8.1 billion in bids at a coupon of 12.5%. The tighter rate in part reflects the larger offer size. As of December 2025, KSh 936.7 million of the Tranche 1 notes remained outstanding, with KSh 463.3 million repaid through annual amortisations since issue.
KMRC deferred a planned 2024 issuance after high interest rates threatened to raise funding costs above levels consistent with its affordable housing mandate. The Central Bank of Kenya has since cut its benchmark rate by 250 basis points to 8.75%, creating a more viable fundraising window.
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. Net interest income contracted from KSh 2.2 billion to KSh 1.7 billion over the same period as market rates declined.
