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KMRC seeks to raise Sh3bn in green bond issue
KMRC will be going to market with the second tranche of its Sh10.5 billion bond programme, coming four years after its debut issuance in February 2022.
The Kenya Mortgage Refinance Company (KMRC) is scheduled to float a sustainability bond on April 28, with a target to raise Sh3 billion, in what would mark the second green-debt issuance just four months after Safaricom listed a record Sh40 billion one on December 16, 2025.
KMRC will be going to market with the second tranche of its Sh10.5 billion bond programme, coming four years after its debut issuance in February 2022, during which it raised Sh1.4 billion through its inaugural corporate bond that attracted 480 percent oversubscription.
The mortgage refinancer will be floating an eight-year tenured note with a 5.1-year average weighted life, meaning principal will be repaid gradually as opposed to a bullet payment at maturity.
Pricing plan
Whereas the pricing of the note is yet to be disclosed, KMRC is eyeing a tax exemption status to allow a single-digit interest rate to lower its funding cost.
Proceeds from the sustainability note are expected to provide a boost to KMRC’s loan book, which closed 2025 at Sh19.6 billion, having grown from Sh11.9 billion in 2024.
“One hundred percent of the net proceeds will be allocated to refinancing eligible green home loans and eligible social home loans as defined in KMRC’s Sustainable Finance Framework dated March 2026. Bond proceeds will be used alongside other concessionary funding at KMRC’s disposal,” KMRC says in a note to investors.
The offer period of the Sh3 billion note will run between April 28, and May 12, with the issuance of the company courting investors with a minimum investment of Sh100,000.
Results announcement and allotment are slated for May 15, 2026, while listing and commencement of trading at the Nairobi Securities Exchange (NSE) are earmarked for May 25.
The company had planned to return to the capital markets in 2024 but was prohibited by a high-interest-rate environment that would translate into a higher cost of funds and undermine its agenda of pushing affordable mortgages downstream in the market.
Market context
In November 2025, Safaricom Plc raised Sh40 billion through a sustainability-linked bond at a coupon of 10.4 percent, drawing bids worth Sh41.86 billion, which translated to 177 percent oversubscription against the Sh15 billion target.
Still in November 2025, East African Breweries Plc took advantage of the low-interest-rate environment and raised Sh16.76 billion in a five-year non-Sustainability Linked corporate bond issuance with the coupon set at 11.8 percent.
In the year ended December 2025, KMRC net earnings stood at Sh1 billion, having contracted marginally compared to Sh1.3 billion in 2024.
The mortgage refinancer’s performance was impacted by a decline in net interest income from Sh2.2 billion to Sh1.7 billion while its expenses grew to Sh370.9 million from Sh341.2 million in 2024.
The lead arranger and placing agent of KMRC’s Sh3 billion note is NCBA Investment Bank, with Cygnum Capital and C&R Group serving as financial advisor and Registrar, respectively. KCB Kenya Ltd is the designated receiving bank, while Ropat Trust and Mboya Wangong’u & Waiyaki are the Note Trustee and Legal Counsel, respectively.
