Media Release

KMRC Corporate Bond Begins Trading at the Nairobi Securities Exchange

 

The Company’s first tranche of its Kes 1.4 billion Medium-Term Note program was oversubscribed by more than 400 percent, netting applications worth Kes8.114 billion

 

Nairobi, March 14, 2022- The Kenya Mortgage Refinance Company PLC (KMRC) has today officially rang the bell to mark the listing and the commencement of trading of the KMRC Corporate Bond on the Nairobi Securities Exchange (NSE).

The Company’s first tranche of the Medium-Term Note program was oversubscribed by more than 400 percent, netting applications worth Kes8.114 billion against a target of Kes 1.4 billion. The proceeds raised will enable KMRC blend its inventory of concessional funds and scale up operations, as it seeks to continue to re-finance home loans and make them affordable and within reach for more Kenyans.

The KRMC Corporate Bond, according to KMRC’s CEO Johnstone Oltetia, is a strategic landmark issue, and the investor response demonstrates a vote of confidence in the company’s strategic direction.

“The response to our inaugural bond issue demonstrates the market’s confidence in the KMRC’s model and strategy and is statement to the importance of the Company’s mandate to increase home ownership and transform the country’s housing sector. 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,” Mr. 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.”

Speaking during the bell-ringing ceremony at the NSE, the Capital Markets Authority Chief Executive Officer Wyckliffe Shamiah said the overwhelming market response to the Kenya Mortgage Refinance Company Medium-Term Note Programme with a 480 percent oversubscription on the first tranche signals growing investor confidence. Mr. Shamiah observed, “this is a major milestone which positions the capital markets as a source of funding to support productive economic activities such as 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.”

Congratulating KMRC on its tremendous growth over the past few years and welcoming them on the market, NSE Chairman Kiprono Kittony stated: “congratulations on this awesome achievement that saw an oversubscription of over 400 percent. 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.”

The transaction was arranged by NCBA Investment Bank Limited, with Mboya Wangongu & Waiyaki Advocates as the legal counsel, Lions Head Global Partners as the Financial Advisors, MAZARS as the reporting accountant, Ropat Trust Company Ltd as Note Trustee and C&R Group the registrar and fiscal agent.

Since it received its operating license from the Central Bank of Kenya (CBK) in September 2020, KMRC has relied exclusively on concessional funds from the World Bank and the African Development Bank (AfDB), the continental development finance institution (DFI), for long-term capital. KMRC has so far accessed Kes6.5 billion from the two DFIs through the National Treasury and refinanced qualifying home loans from participating PMLs with rates on the refinanced loans coming down to single digits (below 10 percent), materially lower than previous average rates of 12 percent.

The KMRC is resolving the asset maturity mismatch that has been blamed for high interest rates on home loans in Kenya. The Company mobilizes long-term funds, which it then on-lends to participating lenders, which include commercial banks, savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs). 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.

 

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability of affordable home loans to Kenyans by providing low interest, fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable for Kenyans. A wholesale institution, KMRC also aims at contributing to the growth of Kenyan capital markets through the issuance of corporate bonds as a source of sustainable long-term fund, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the origination of mortgages and contributing to the growth of the mortgage market in Kenya through support to Primary Mortgage Lenders.

Additional information may be found at www.kmrc.co.ke

 

KMRC’s first bond issue results in 480 percent over-subscription

Success establishes home loans re-financier as issuer of note and helps it with track record for future issuances  

Nairobi, February 22, 2022-The Kenya Mortgage Refinance Company’s (KMRC) inaugural corporate bond has attracted a 480 percent over-subscription and a total performance rate of 579.6 percent, denoting success in the home loan re-financier’s quest to build its issuer credentials.

Results issued show that the first tranche of Kes1.4 billion, under the Kes10.5b Medium-Term Note (MTN) Program, netted applications worth Kes 8.114 billion.

This outcome means that after taking the Kes1.4 billion it had sought in its first foray into the local capital markets, KMRC will literally be leaving a substantial Kes 6.714 billion on the table, denoting impressive liquidity in the market. The issue did not have a green-shoe option.

The MTN, which was available to investors with a minimum investment of Kes100,000 and subsequent multiples of the same amount, was on sale over a two-week window, which ended on February 18, 2022. The interest on the corporate bonds, payable two times per year at 12.5 percent, was its strongest selling point, being a premium above the yield on comparative Government Paper of the same tenor.

“The success of this first issue represents a resounding validation of our business model and strategy by investors. The cash raised will enable us to blend our inventory of concessional funds and therefore substantially scale up our operations, as we seek to re-finance more home loans and make them affordable and within reach for more Kenyans. This success will certainly provide KMRC with a positive track record which is critical for opening the door to what will be an active pipeline of bond issues, going forward,” said KMRC CEO Johnstone Oltetia.

Since it received its operating license from the Central Bank of Kenya (CBK) in September 2020, KMRC has relied exclusively on concessional funds from the World Bank and the African Development Bank (AfDB), the continental development finance institution (DFI), for long-term capital. KMRC has so far accessed Kes6.5 billion from the two DFIs through the National Treasury and refinanced qualifying home loans from participating PMLs with rates on the refinanced loans coming down to single digits (below 10 percent), materially lower than previous average rates of 12 percent.

The KMRC is resolving the asset maturity mismatch that has been blamed for high interest rates on home loans in Kenya. The Company mobilizes long-term funds, which it then on-lends to participating lenders, which include commercial banks, savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs). 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.

 

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability of affordable home loans to Kenyans by providing low interest, fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable for Kenyans. A wholesale institution, KMRC also aims at contributing to the growth of Kenyan capital markets through the issuance of corporate bonds as a source of sustainable long-term fund, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the origination of mortgages and contributing to the growth of the mortgage market in Kenya through support to Primary Mortgage Lenders.

KMRC launches Kes 10.5 Billion Medium-Term Note Programme to raise long-terms funds

First tranche is valued at Kes1.4 billion, fixed interest rate set at 12.5 percent per year
Nairobi, February 4, 2022 – The Kenya Mortgage Refinance Company (KMRC) has today launched its first Medium-Term Note (MTN) programme, which it seeks to raise Kes10.5 billion in the next four years.
Cash raised from the MTN programme – whose first tranche is the Kes1.4 billion worth of bonds put on sale today – will be disbursed to participating Primary Mortgage Lenders (PMLs), for onward lending to home loan borrowers at a lower rate, as the home loans re-financier seeks to make home ownership affordable for Kenyans.
The notes, which are available to investors with a minimum of Kes100,000 and subsequent multiples of Kes100,000, will be on sale to investors during a two-week window from today (February 4) to February 18, 2022. The interest on the MTN – which has been set at 12.5 percent – is payable two times per year. The 12.5 percent rate is backed by KMRC’s recently acquired rating of AA-(KE) / A1+ (KE) (LT/ST) from GCR, the rating agency.
“This is an important strategic landmark for us, as our mission to blend and diversify our inventory of long-term funds kicks off. This MTN programme allows us to scale up our operations, thereby impacting more households through our work of re-financing home loans and making them affordable and within reach for Kenyans, said KMRC CEO Johnstone Oltetia.”
The issuance marks KMRC’s first foray into the local capital market as it seeks to raise sustainable long-term capital, in its quest to reduce mortgage interest rates, make housing affordable and improve the viability of home loans as a pathway to home ownership for more Kenyans. Hitherto and since it received its operating license from the Central Bank of Kenya (CBK) in September 2020, KMRC has relied exclusively on concessional loans from the World Bank and the African Development Bank (AfDB), the continental development finance institution (DFI), for long-term capital.
Since receipt of its license, KMRC has accessed Kes6.5 billion cumulatively from the credit lines (World Bank and AfDB) through the National Treasury. With these funds, KMRC has so far been able to refinance qualifying home loans from participating PMLs with rates on the refinanced loans below 10 percent, materially lower than previous average rates of 12 percent.
The KMRC model works by resolving the asset maturity mismatch that has been blamed for high interest rates on home loans in Kenya. The company mobilizes long-term funds, which it then on-lends to participating lenders, which include commercial banks, savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs). 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.
The participating PMLs, which are also KMRC shareholders include KCB, Co-operative, DTB, HF Group, NCBA, Absa, Stanbic and Credit Banks. The SACCO PMLs are Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee. The sole MFI is Kenya Women Finance Trust (KWFT).

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability and affordability of home loans to Kenyans by providing low interest, fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable for Kenyans. A wholesale institution, KMRC’s objectives include contributing to the growth of Kenyan capital markets through the issuance of KMRC bonds as a source of sustainable long-term fund, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the origination of mortgages and contributing to the growth of the mortgage market in Kenya through support to Primary Mortgage Lenders.

Additional information may be found at https://kmrc.co.ke/shareholder-information/

KMRC Receives Capital Markets Authority’s approval to Issue KES10.5 billion Medium Term Note Program to Raise Long-terms Funds

Funds raised to be blended with current credit lines’ funds and disbursed to primary Mortgage lenders for onward lending to mortgagors

Nairobi, January 12, 2022- Kenya Mortgage Refinance Company (KMRC) has received Capital Markets Authority’s (CMA) approval to issue a Medium-Term Note Program, through which it seeks to raise up to Kes10.5 billion in various tranches.

The cash raised from the issuance, whose first tranche is Kes 1.4 billion will be disbursed to participating primary mortgage lenders (PMLs), for onward lending to mortgagors.

This is the first time the Mortgage Refinance Company is issuing a Medium-Term Note Programme to raise long-term capital, in its quest to reduce mortgage interest rates and lengthen repayment tenors, thus, make housing affordable and improve the viability of home loans as a pathway to home ownership for Kenyans. Hitherto and since it started operations in 2019, KMRC has relied exclusively on concessional loans from the World Bank and African Development Bank (AfDB), the continental Development Finance Institution (DFI), for such funds.

“This is an important milestone for KMRC as it aims to blend and diversify its sources of funds. Through this issuance, KMRC seeks to build its profile as a regular issuer of bonds in the Kenyan Capital Market. as we work to raise more long-term capital, thereby re-financing more home loans and making them affordable and accessible for Kenyans,” Said KMRC CEO Johnstone Oltetia.

The KMRC business model works by resolving the asset maturity mismatch that has contributed largely to high interest rates on home loans in Kenya. The company mobilizes long-term funds, which it then on-lends to participating PMLs, which include commercial banks, savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs). 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. This issue follows KMRC’s receipt of an issuer rating of AA- from GCR, the rating agency, which was granted in August 2021.

The participating PMLs, which are also KMRC shareholders include KCB, Co-operative, DTB, HF Group, NCBA, Absa, Stanbic and Credit Banks. The SACCO PMLs are Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas Imarika, Tower, Stima and Harambee. The sole MFI is Kenya Women Finance Trust (KWFT).

 

 

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability and affordability of home loans to Kenyans by providing low interest, fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable for Kenyans.

A wholesale institution, KMRC’s objectives include contributing to the growth of Kenyan capital markets through the issuance of KMRC bonds as a source of sustainable long-term fund, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the origination of mortgages and contributing to the growth of the mortgage market in Kenya through support to Primary Mortgage Lenders.

Additional information may be found at www.kmrc.co.ke

 Media Contacts

KMRC Corporate Communications

Irene Kadima, Ikadima@kmrc.co.ke | 254 111 022 407 | +254 111 022 400 |+254 725 854 607

Naivasha to Host Affordable Housing Talks

The inaugural Conference will be hosted by KMRC in collaboration with the State Department for Housing and Urban Development and is themedAffordable Housing in Kenya: Leveraging the Supply and Demand Linkages

Nairobi, December 6, 2021- Players in Kenya’s housing industry converge on the conference mecca of Naivasha this week to take stock of achievements under the Affordable Housing Pillar of the Big 4 Agenda, enhance demand and supply sides linkages and discuss issues affecting the delivery of affordable housing and how to resolve them.

Convened by the Mortgage Re-financier Kenya Mortgage Refinance Company (KMRC) and the State Department of Housing and Urban Development the Affordable Housing Conference, the first of its kind in Kenya, is schedule for December 8-9, 2021.

The conference, on the theme Affordable Housing in Kenya: Leveraging the Supply and Demand Linkages, is expected to bring together public and private sector players to discuss demand and supply side factors relevant to the delivery of affordable housing in Kenya.

 

The Affordable Housing Conference targets project developers, investors – pension funds, insurance companies, SACCOs, consumers, development partners (AfDB, USAID, World Bank, IFC), Government MDAs and County Governments. Others are financiers, consultancy firms, policy makers and regulators, research institutions and professional associations in the built environment.

 

This conference is key to fostering public-private dialogue in the pursuit of Kenya’s AHP goals. As we address the demand side by progressively lowering interest rates on home loans, thereby driving affordability, KMRC is alive to the fact that for truly sustainable affordable housing to be achieved, the supply and demand side must work in tandem. We hope this conference will engender viable solutions to the challenges currently constraining the sub-sector,” said KMRC CEO Johnstone Oltetia. “

 

The conference comes against the backdrop of an aggressive Affordable Housing Program (AHP), that the Government is currently implementing. The Government has also tasked both private and public sectors’ stakeholders to reimagine practical measures that can be implemented in the short to medium term to fast-track delivery of housing objectives. In his recent State of the Nation address to Kenya’s Legislature, President Uhuru Kenyatta noted that some 186,000 units had been constructed in the last four years.

 

Housing is recognized as one of the critical sectors under the social pillar of the Vision 2030, Kenya’s main economic blueprint. Further, Affordable Housing has been prioritized as one of the initiatives under President Kenyatta’s “Big 4 Agenda” to ensure that low and middle-income households have access to decent and affordable housing units. Additionally, AHP is one of the Government’s main development objectives for the period 2017 – 2022, under the third medium term plan (MTP III) of Kenya’s Vision 2030. The State Department for Housing and Urban Development is mandated to implement the Program by providing an enabling environment and implementing plans to deliver 500,000 affordable housing units.

 

ENDS…

 

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability and affordability of home loans to Kenyans by providing low interest, fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable for Kenyans. A wholesale institution, KMRC’s objectives include contributing to the growth of Kenyan capital markets through the issuance of KMRC bonds as a source of sustainable long-term fund, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the origination of mortgages and contributing to the growth of the mortgage market in Kenya through support to Primary Mortgage Lenders.

 

Additional information may be found at www.kmrc.co.ke

KMRC LENDS OUT SH.2.75B FOR AFFORDABLE HOUSING

Nairobi: Thursday, December 17, 2020: The Kenya Mortgage Refinancing Company (KMRC) has today disbursed Sh.2.75 billion to participating primary mortgage lenders (PMLs)

KCB Bank, HF Bank, Stima Sacco and Tower Sacco have each received Sh.2.13 billion, Sh.514million, Sh.69 million and Sh.29 million respectively, marking KMRC’s debut lending since its start. This first disbursement is drawn from the World Bank line of credit.

This initial lending, provided at a fixed rate of 5% per annum, will help mortgage lenders create new mortgages in the market on long term-tenor within single digits rates.

The 4 institutions made successful applications and demonstrated a refinanceable mortgage portfolio of 1400 mortgages, which acts as the collateral for the funding.

According to KMRC’s Chief Executive Officer Johnstone Oltetia, the Sh. 2.75 billion is part of a Sh.4.5 billion mortgage loan portfolios available for immediate refinancing to participating financial institutions. KMRC is drawing down funds from both the World Bank and African development Bank lines of credit thus participating financial institutions are encouraged to submit applications for refinancing.

“Today’s disbursement of funds marks a historic new dawn in affordable housing finance in Kenya. It illustrates the legal, structural and strategic foundations that we have been putting in place since inception for a fit for-purpose mortgage refinance company,” said Mr. Oltetia.

There are more participating institutions who are at an advanced stage of accessing funding from KMRC. They are presently preparing their mortgage portfolio based on KMRC’s eligibility criteria, and once submitted KMRC will review and release more funding in due course” said Mr. Oltetia.

This refinancing will go a long way in making affordable housing a reality – with part of the funds earmarked for financing the Affordable Housing Programme’s Park Road Housing Project. KCB and HF Bank are among the seven local banks that have committed to set aside Sh.365 billion worth of mortgages for the Affordable Housing Programme. Other shareholders that will be refinanced by KMRC include DTB, Absa, NCBA, Credit Bank and Kenya Women Microfinance Bank (KWFT) as well as Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika and Harambee Saccos.

Mr. Oltetia said KMRC will continue to innovate around fixed long-term financing to participating primary mortgage lenders to speed up growth in the uptake of home loans in Kenya.

“KMRC is preparing to raise additional funds to support home loans through a bond issue in the third quarter of 2021. Noting that KMRC does not have a track record in the market, an agreement has been reached with African Development Bank to provide a partial credit guarantee and with further support from World Bank group we expect this bond issue to be successful” said Mr. Oltetia.

He added that issuance of bonds will help cater for the market-based housing finance, beyond the refinancing of affordable mortgages which is capped at Sh.4 million within Nairobi metro; and Sh 3 million elsewhere in the Country.

KMRC was this year, September, issued with a license by Central Bank of Kenya, paving way for disbursement of funds by the World Bank and continental DFI (Development Finance Institution) African Development Bank (AfDB), to the tune of Sh. 35 billion in form of debt financing through the National Treasury.

KMRC was established two years ago to support the Affordable Housing Pillar of the Government’s Big Four Agenda. It will actualize this by providing secure, long term finance to PMLs, who are then supposed to advance the same to individual borrowers. The idea is to address the shortage of long-term finance in the Kenyan financial market, while addressing the problem of asset maturity mismatch, which is responsible for the high cost and general inaccessibility of home loans to many Kenyans.

Ends

About KMRC

Established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), Kenya Mortgage Refinance Company’s role is to provide long-term funds to primary mortgage lenders (Banks, Micro Finance Banks and Saccos) in order to increase the availability and affordability of home loans to Kenyans. KMRC provides concessional fixed rate, long term finance to mortgage financiers so that they can transfer the same benefits to individual borrowers, making home loans more accessible and affordable to a majority of Kenyans. A wholesale financial institution, KMRC’s objectives include contributing to the growth of Kenyan capital markets through the issuance of bonds as a source of sustainable long-term funding, assisting in the standardization of mortgage practices in Kenya through enhanced capacity building to member institutions on the underwriting of mortgages and generally contributing to the growth of the mortgage market in Kenya.

Additional information may be found at www.kmrc.co.ke

KMRC RECEIVES LICENSE FROM THE CBK TO COMMENCE LENDING BUSINESS

• License unlocks Sh35 billion in debt and equity capital for refinancing of home loans
• KMRC has fulfilled all the licensing requirements enabling granting of license by the regulator
• Mortgage product to target majority of Kenyans in the middle to lower income segment

Nairobi, September 18, 2020 – The Kenya Mortgage Refinance Company (KMRC), the public-private partnership (PPP) firm formed by the Government to drive the affordable housing finance in Kenya, has today received a license from the Central Bank of Kenya (CBK).

Access or download the online article with below.

2020 KMRC AGM Press Release.

International Finance Corporation (IFC) and Shelter Afrique okayed as shareholders
Nairobi, June 30, 2020 – The Kenya Mortgage Refinance Company (KMRC), the public-private partnership (PPP) firm formed by the government to make home loans affordable in Kenya, has today held its first Annual General Meeting (AGM), during which its board approved two new shareholders.

Access or download the online article with below.