5 September 2010

Nairobi — Approval by the Capital Markets Authority (CMA) for the issue and listing of a Sh10 billion bond by Housing Finance is poised to give the mortgage financier the impetus it seeks to benefit from the growing demand for housing in urban and rural areas.

Current demand is estimated at 150,000 units per annum with supply estimated at 35,000 units. With such a massive supply gap, the private sector is expected to play a critical role in meeting the shortage.

"The approval and consequent listing will provide the requisite financial gearing to enable Housing Finance play an integral role in helping boost the available supply of units with a number of major projects already in the pipeline," said Mr Frank Ireri, HF's managing director.

He added that the bond is part of a plan to source long-term funding to bolster growth of its business in mortgages and property financing.

Approval means the financier can now embark on a medium-term note programme that enables it to offer debt securities on a regular and continuous basis.

The bond will have a tenure of seven to 10 years, subject to final confirmation by the issuer (HF), and will be tradeable at the Nairobi Stock Exchange.

The good news follows an earlier nod from the Central Bank of Kenya, which indicated no objection to the issuance of the medium note.

Contrary to earlier reports, funds raised will not go to capital but form part of debt funding.