Shelter Afrique offers N46bn bond

Pan- African housing development financier, Shelter Afrique, has completed its debut N46 billion ($110.7 million) Series 1 fixed rate senior unsecured bond issuance in Nigeria’s capital market under its N200bn ($481.3m) bond issuance programme.

The company which announced the development yesterday, said it would use the bond’s proceeds to fund mass housing development by Tier 1 real estate developers and provide lines of credit.

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The dual tranche bond issuance was 60.7 per cent oversubscribed with the order book peaking at N64.3bn ($154.6m), enabling Shelter Afrique to exercise the “green shoe” option and raise an additional N6bn ($14.4m) more than the original N40bn plan ($96.3m).

The five-year Tranche A bond 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.

The company which raised KES3.5bn bond on the Nairobi Stock Exchange, Kenya, in 2013, said this was the first time it was tapping the Nigerian debt capital market to address the housing deficit in the country.

Commenting on 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 shall put the proceeds of the bond issue into good use that will ensure that more value is created for them.”

The managing director of FSDH Capital Limited, Mr Tolu Osinibi, said the success of the bond issuance would encourage other supranational financial institutions to tap Nigeria’s debt capital market for their naira funding needs.