Fixed-income investors have snapped up Sh500 million of Shelter Afrique's bond, which was the last tranche of a Sh3 billion bond issued in 2011.

The investors will earn yields of 12.5 per cent annually for the bond which will mature on December 14, 2015. The first tranche of Sh2.5 billion was issued in 2011.

Shelter Afrique's managing director Alassane Ba said the full subscription demonstrated local investor's faith in the housing Pan-African housing financier.

"We received a very positive response from the market and the bond was snapped up in record time. This positive market reception to our bond offering, the period notwithstanding, clearly demonstrates increased local investor confidence in Shelter Afrique's long-term value proposition," he said.

He said the Sh2.5 billion raised through the first tranche had been utilised to finance projects in Nairobi, Mombasa and Kisumu.

"Ten projects at an estimated cost of Sh9.4 billion have been funded with proceeds of the first tranche. Proceeds from this last tranche will be used to fund already approved projects in Nairobi and Mombasa."

BÂ said the company is focusing on medium to long-term funding solutions for affordable housing in Kenya, where other challenges include poor planning, high cost of infrastructure development and cost of building materials.

Shelter Afrique has financed more than 100 projects in the country, amounting to about Sh11.6 billion worth of lending. The new bond began trading at the Nairobi Securities Exchange on January 2, 2013.