The Star (Nairobi)

Kenya: HF to Issue First Tranche of Sh20 Billion Bond By June

Housing Finance is looking to float the first tranche of its recently approved Sh20 billion bond in the second quarter of 2014, it said yesterday. It will be seeking to raise up to Sh10 billion, depending on market demand for the seven-year note, group managing director Frank Ireri said.

The mortgage lender will raise the debt to fund its revived subsidiary, Kenya Building Society, and finance home buyers. It is however still uncertain over pricing, hinging its offer on the success of Kenya's impending sovereign bond which could reduce the government's appetite for local debt.

"We will see how early 2014 goes.... If the eurobond succeeds, it could reduce the government's appetite to raise domestic debt, which would have an impact on the market rates," Ireri said.

The rates on government papers - Treasury Bonds - are used as a benchmark by banks to set interest rates. "We will hopefully go into the market in the second quarter, and we would love to offer a single digit (interest rate pricing)," he said.

KBS yesterday unveiled its second joint venture in 20 months, partnering with the Mbugua Kibathi family - who own Sagret Hotel in Nairobi - to build 220 units of two- and three-bedroom in Kahawa Sukari, on a five-acre parcel of land.

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