The Nigeria Mortgage Refinance Company has announced the completion of its N11bn 13.80 per cent series 2 bond issuance under its N440bn medium term note programme.
According to a statement by the firm, the raising of the bond is part of its primary mandate of providing liquidity to the Nigerian mortgage market.
It explained that the net proceeds would be used to refinance eligible mortgage loans originated by the participating mortgage lending banks.
“This is coming on the heels of its inaugural N8bn 14.9 per cent series 1 bond issue in July 2015, which was fully deployed towards refinancing legacy mortgage loan portfolios of the participating eligible member-mortgage lending banks,” it added.
The statement said the series 2 bonds were unconditionally and irrevocably guaranteed by the Federal Government of Nigeria and thus ascribed an ‘AAA’ rating by both Global Credit Rating Co. and Agusto & Co.
It noted that the order book was subscribed by over 200 per cent.
According to the statement, the bonds were subscribed to by domestic investors, with the Pension Fund Administrators representing over 70 per cent of the investors.
The bonds were priced at a spread of c.74 basis points above the interpolated 15-year FGN yield of 13.06 per cent as of the opening of book building, it added.
The Managing Director, NMRC, Mr. Kehinde Ogundimu, stated, “The bond issuance reinforces our commitment to encourage and promote homeownership in Nigeria by linking the capital markets with the housing sector, and establishing an operating and viable secondary mortgage market to support the primary mortgage market.”
The statement said the NMRC remained committed to transmitting the full benefit of the pricing efficiency achieved in its funding cost to home borrowers through the participating primary mortgage lenders, thereby lowering costs and driving activities that would deepen the mortgage market.
The Chairman, Dunn Loren Merrifield Advisory Partners, Mr. Sonnie Ayere, stated that the high subscription level for the series 2 bonds was indicative of the strong investor appetite for the long-tenured asset class and underscored the confidence reposed in the underlying principle and operating model of the NMRC.
He noted that the Nigerian mortgage market would witness a significant boost as the mortgage pre-financing facility, Mortgage Warehouse Funding Limited, began its operations.
“The MWFL is sponsored by the NMRC, member mortgage banks, Mortgage Bankers Association of Nigeria, Lion’s Head of Global Partners through the African Local Currency Bond Fund and the DLM Group”, he added.
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