The Kenya Mortgage Refinance Company (KMRC) has officially launched a Kes 3 billion sustainability bond, representing the second tranche of its larger Kes 10.5 billion bond programme. The offer opened on April 28, 2026, and will remain available to investors until May 12, 2026, with a minimum investment threshold of Kes 100,000. The bond is structured as an eight-year instrument with an average weighted life of 5.1 years, meaning principal will be repaid gradually rather than as a single bullet payment at maturity. While the final pricing of the note has not yet been disclosed, KMRC is actively pursuing tax-exempt status for the issuance, which would enable a single-digit interest rate and significantly lower the company’s overall funding costs.
Proceeds from the bond will be allocated entirely to refinancing eligible green home loans and eligible social home loans, as defined under KMRC’s Sustainable Finance Framework published in March 2026. The funds will be deployed alongside other concessionary financing already at KMRC’s disposal. This issuance is expected to provide a substantial boost to KMRC’s loan book, which closed the 2025 financial year at KES 19.6 billion, reflecting robust growth from KES 11.9 billion in 2024.
KMRC’s return to the capital markets comes four years after its debut corporate bond issuance in February 2022, which raised KES 1.4 billion and attracted an exceptional 480 percent oversubscription. The company had originally planned to return to the market in 2024 but was deterred by a high-interest-rate environment that would have translated into a higher cost of funds, thereby undermining its core mandate of delivering affordable mortgages to the Kenyan market.
The current low-interest-rate environment has proven more favourable. Over the past 16 months, the Central Bank of Kenya has reduced its benchmark rate by a cumulative 2.5 percentage points to 8.75 percent, triggering a steady decline across market interest rates.
The yield on the 91-day Treasury bill, for instance, has fallen from 9.63 percent to 7.57 percent. In this context, Safaricom Plc raised KES 40 billion in November 2025 through a sustainability-linked bond priced at a coupon of 10.4 percent, attracting bids worth KES 41.86 billion and achieving 177 percent oversubscription against an initial Kes 15 billion target. That same month, East African Breweries Plc raised KES 16.76 billion through a five-year standard corporate bond at a coupon of 11.8 percent.
KMRC Earnings
For the financial year ended December 2025, KMRC reported net earnings of KES 1 billion, representing a marginal contraction from KES 1.3 billion recorded in 2024. This performance was impacted by a decline in net interest income from Kes 2.2 billion to Kes 1.7 billion, alongside an increase in operating expenses to Kes 370.9 million from Kes 341.2 million in the prior year.
Results announcement and allotment of the bond are scheduled for May 15, 2026, while listing and commencement of trading on the Nairobi Securities Exchange are earmarked for May 25, 2026. The lead arranger and placing agent for the transaction is NCBA Investment Bank, with Cygnum Capital serving as financial advisor and C&R Group as registrar. KCB Kenya Ltd has been appointed as the designated receiving bank, while Ropat Trust and Mboya Wangong’u & Waiyaki act as Note Trustee and Legal Counsel, respectively.
