Shelter Afrique Raises N46bn Bond to Curb Housing Deficit
Nume Ekeghe
Shelter Afrique has announced that it successfully raised N46 billion ($110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in Nigeria’s capital market under its N200 billion ($481.3 million) bond issuance programme.
The dual tranche bond issuance was 60.7 per cent oversubscribed with the order book peaking at N64.3 billion ($154.6 million), enabling Shelter Afrique to exercise the ‘green shoe’ option and raise an additional N6 billion ($14.4 million) more than the original N40 billion plan ($96.3 million).
The 5-year Tranche A bonds priced at 13.00 per cent and the seven-year Tranche B bonds priced at 13.25 per cent. The tenors of the bonds are aligned with the institution’s housing finance strategy and long-term plans in Nigeria. Shelter Afrique will use the bond proceeds to fund mass housing development by tier 1 real estate developers, and to provide lines of credit.
Announcing the result, Shelter Afrique’s Acting Managing Director, Kingsley Muwowo said: “This is the first time Shelter Afrique is tapping the Nigerian debt capital market and the positive market reception is a clear indication of investor confidence in our long-term value proposition for the Nigerian housing market. We would like to assure our investors that we should put the proceeds of the bond issue into good use that will ensure that more value is created for them.”
Muwowo said the issuance of the Naira-denominated bonds priced at the official exchange rate of $1 to N415.58 reflects the organisation’s desire to focus on tailor-made, long-term funding solutions for the provision of affordable and adequate housing in Nigeria and across Africa.
Speaking, the Managing Director of FSDH Capital Limited, Mr. Tolu Osinibi, said: “FSDH Capital is pleased to have advised Shelter Afrique on its successful debut bond issuance in Nigeria’s capital market. Shelter Afrique continues to play a pivotal role in housing development across Africa and the success of the bond issuance will encourage other supranational financial institutions to tap Nigeria’s debt capital market for their Naira funding needs. We thank the investor community for their support on the bond issuance. We also thank the Board and management of Shelter Afrique for trusting us with this milestone transaction, and their commitment and dedication throughout the process.”
