Kenya Mortgage Refinance Company (KMRC)'s inaugural green bond defied absence of a tax-free sweetener to attract bids worth Sh9.4 billion against the targeted Sh3 billion, representing a performance of 312.8 percent.
The mortgage refinancing company will use the billions to provide cheap loans for green buildings, which are designed to use natural sustainable materials, be energy efficient and reduce water use in efforts to minimise environmental impact.
The eight-year paper priced at 12.2 percent was on offer between April 28 and May 12, 2026 and is earmarked for listing on the Nairobi Securities Exchange (NSE) on May 25.
The performance underscores high appetite for environmentally conscious debt raise issuance, with Safaricom’s November 2025 note having attracted bids worth Sh41.4 billion against a Sh15.0 billion target, registering 276.0 percent performance.
This makes the second tranche of KMRC’s 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’s green bond has a 5.1-year average weighted life, implying that note holders will have the principal amount of the issuance paid down gradually as opposed to a bullet payment at maturity.
Proceeds from the sustainability security 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,” KMRC said in a note to investors.
“Bond proceeds will be used alongside other concessionary funding at KMRC’s disposal.”
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.
East African Breweries Plc, in November 2025, also 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 Sh1.0 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.
