Demand strong for Housing Finance bond

Oct 08, 2010

Demand for the first part of a Sh10 billion (€89.2 million) bond issued by Kenya's Housing Finance has been strong among investors.

Business Daily reports the bond was originally to be split into two, however interest resulted in the first instalment being raised to Sh7 billion. It is being made available in order to raise funding to construct affordable homes for sale to the middle class and Managing Director Frank Irei was quoted by the news source as saying: "The long-term credit financing will enable us [to] increase our footprint in supplying affordable and adequate housing."

The vast majority (98 per cent) of investors were institutions - with the remaining two per cent being retailers - and 80 per cent chose the fixed-rate option. Senior Associate for NIC Capital Maurice Opiyo explained demand for the fixed note "was due to investors having a predetermined forward-looking cash flow [return]".

Bids for the bond were being accepted up to October 1st, Daily Nation reported last month, with Mr Ireri telling the newspaper Housing Finance intends to use the funding to increase its market share from 35 per cent to 50 per cent.