Press Release: CMA approved Kshs3.9 billion corporate bond for investment in affordable housing

PRESS RELEASE

CMA approved Kshs3.9 billion corporate bond for investment in affordable housing

Nairobi, 02 December 2021… As part of its efforts to facilitate affordable housing, which is a pillar of the Big Four National Government Agenda, the Capital Markets Authority (CMA) has approved the issuance of a secured Ksh3.9 billion Medium Term Note programme for Urban Housing Renewal Development Limited.

The Medium-Term Note Programme, which has a Ksh600 million green-shoe option, and an 18-month tenor is a restricted public offer for sophisticated investors. It will be offered at an interest rate of 11 percent. The proceeds will support an affordable housing project in Pangani in Nairobi, comprising 1,562 housing units is a partnership with the Nairobi County Government.

The CMA Chief Executive Mr. Wyckliffe 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''.

One of the constraints of the growth of housing in Kenya is the financing constraint with total mortgages in Kenya at under 30,000 as mortgages remain out of the reach of many Kenyans, while the houses units in the market are also relatively expensive.

Mr. Shamiah underscored the importance of the innovative capital markets financing solution through a corporate bond to deliver relatively cheaper houses to Kenyans. He added that the success of this project is expected to be used as a model to structure financing to facilitate roll out of more affordable houses for which there is growing demand across the country.

Mr. Shamiah also noted the enhanced issuer confidence in the corporate bond market with this bond coming on the back of the recent oversubscription of 245 percent reported for the EABL medium term notes listed at the Nairobi Securities Exchange (NSE) last month. CMA approved an issuance to raise Kshs11 billion, but applications were received for nearly Ksh38 billion.

He added that in the last one year, the Authority has approved the issuance and listing of the Centum Investments Company Plc Kshs4 billion medium-term note, and the Kshs8 billion multicurrency Family Bank medium-term note which recorded an oversubscription of 147 percent.

The oversubscription of the EABL and Family Bank corporate bond issues by 245 percent and 147 percent, respectively, indicates enhanced investor confidence and growing liquidity in the market.

ENDS

BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors' interest. For more information, please contact: Antony Mwangi, Manager Corporate Affairs & International Relations on This email address is being protected from spambots. You need JavaScript enabled to view it.

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