In this file picture, President Kibaki rings a bell during the launch of the Sh7 billion Housing Finance bond trading at the bourse. Housing Finance has attracted nearly double the amount of cash it has sought through the Sh2.9 billion second tranche bond. File
Mortgage firm Housing Finance has attracted nearly double the amount of cash it has sought through the Sh2.9 billion second tranche bond.
Investors brought bids of Sh5.2 billion for the medium-term paper, closing the Sh10 billion debt financing programme that began in 2010.
The first tranche raised Sh7.1 billion although the mortgage firm had only asked for Sh5 billion - showing investor confidence in the future of the company.
The oversubscription means that investors who applied for more than the minimum Sh100,000 will get additional notes on a pro-rata basis (bidding amount) of 56.5 per cent.
The seven-year notes are at a fixed 13 per cent interest rate and to make them easily tradable they will be listed on the Nairobi Securities Exchange.
Growth strategy HF chief executive Frank Ireri said that the oversubscription was the result of investors warming up to the mortgage company’s profitability and growth strategy.
“The positive growth of Housing Finance’s top line and bottom-line, the firm’s growth strategy, scope for revenue generation due to housing demand and a healthy appetite for fixed income security all helped to boost demand for the bond issue,” said Mr Ireri in a statement.
The money will be used for onward lending to mortgage takers, property developers, joint ventures and for Housing Finance’s employee housing scheme.
Housing Finance has already lined up 11 projects comprising mansionettes, apartments and a hotel for financing. NIC Capital was the lead arranger for the medium-term note and NIC Securities was the lead sponsoring stockbroker and placing agent.
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