Treasury Teams up With Private Sector to Establish KMRC for Bond Issuance

National Treasury will team up with the private sector – commercial banks, international financial institutions, nonbank financial institutions, and Saccos – in establishing a wholesale financial institution, Kenya Mortgage Refinancing Company (KMRC).

KMRC will issue bonds in the local capital markets and the proceeds used to extend long-term loans to financial institutions secured against mortgages.

The arrangement will target low-income earners who are unable to take up home loans from financial institutions.

Treasury will provide the initial 1.5 billion shillings capital in setting up KMRC and enhanced capitalization will be provided by equity investors.

Secondary trading edged up from 758 million shillings recorded in Tuesday’s session to1.36 billion shillings.

Turnover was pushed by trades on the recently closed 20-year paper which traded between rates of 13.2 percent -13.3 percent.

The market is still calm as most institutional investors are yet to fully participate. We expect some increased activity next week as clients come back to the market. Interbank rates closed at 6.4476 percent from a previous of 6.2448 percent, signaling tight liquidity.