The Kenya Mortgage Refinance Company (KMRC) is set to launch a sustainability bond on April 28, targeting Sh3 billion in fresh capital in what will become the second major green debt issuance in Kenya within four months, following Safaricom’s landmark Sh40 billion sustainability-linked bond issued in December 2025.
The planned issuance forms the second tranche of KMRC’s broader Sh10.5 billion bond programme and comes four years after the institution’s first corporate bond in February 2022, which raised Sh1.4 billion after attracting overwhelming investor demand with a 480% oversubscription.
KMRC will issue an eight-year note with an average weighted life of 5.1 years, meaning investors will receive gradual principal repayments over the life of the bond rather than a lump-sum payment at maturity.
Although pricing details have not yet been announced, the mortgage refinancer is pursuing tax-exempt status for the bond in a bid to secure a single-digit coupon rate and reduce its overall borrowing costs.
Funds raised from the sustainability bond are expected to strengthen KMRC’s loan portfolio, which expanded to Sh19.6 billion by the end of 2025 from Sh11.9 billion a year earlier.
According to investor documents, the proceeds will be channelled entirely towards refinancing qualifying green and social housing loans under the company’s Sustainable Finance Framework introduced in March 2026. KMRC noted that the bond proceeds would complement other concessional financing already available to the institution.
The offer period will run from April 28 to May 12, with the company inviting investors through a minimum subscription of Sh100,000.
Allocation results are expected on May 15, while listing and trading at the Nairobi Securities Exchange (NSE) are scheduled to begin on May 25.
KMRC had initially intended to tap the capital markets in 2024 but postponed the move due to elevated interest rates, which would have increased funding costs and undermined its affordable housing financing strategy.
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The renewed appetite for corporate debt issuance follows improving market conditions. In November 2025, Safaricom successfully raised Sh40 billion through a sustainability-linked bond carrying a 10.4% coupon after receiving bids worth Sh41.86 billion, significantly exceeding its Sh15 billion target.
During the same month, East African Breweries Plc also entered the debt market, securing Sh16.76 billion through a five-year corporate bond priced at an 11.8% coupon.
For the year ended December 2025, KMRC posted net earnings of Sh1 billion, slightly lower than the Sh1.3 billion recorded in 2024.
The decline was largely attributed to weaker net interest income, which fell from Sh2.2 billion to Sh1.7 billion, alongside a rise in operating expenses to Sh370.9 million from Sh341.2 million.
NCBA Investment Bank is acting as lead arranger and placement agent for the bond issue, while Cygnum Capital and C&R Group are serving as financial adviser and registrar respectively. KCB Bank Kenya has been appointed as the receiving bank, with Ropat Trust acting as note trustee and Mboya Wangong’u & Waiyaki serving as legal counsel.
