Tuesday, April 26, 2022 / 10:58 AM / Shelter Afrique / Header Image Credit: Shelter Afrique 

As part of efforts to improve the financing of affordable housing projects in Nigeria, Shelter Afrique signed the "Series 1 Naira Denominated Bond" at a ceremony in Lagos. 

The Acting Managing Director, Shelter Afrique, Mr. Kingsley Muwowo, said the signing of the Naira denominated bond met an industry need and solved a genuine problem, which was how to address the forex challenges and bridge the financing gap in a robust market like Nigeria. 

According to Muwowo, industry advocacy had always been that the capital market was the answer to long-term housing funding. The company demonstrated a commitment to shareholder value and socioeconomic impact by closing the transaction. 

The Chief Executive acknowledged that the demand for affordable housing in Nigeria was huge, and h observed that it would continue as the government plans to grow the economy and promote domestic capital formation. He believed that any organization committed to addressing the challenge of the domestic infrastructure funding gap was bound to grow its balance sheet. 

Speaking further, he pointed out that the development addresses two of the company's strategic pillars, Organisational and Financial sustainability. 

"As we reflect on our journey over the last Forty years, we are charged with how we move ahead, how we can better address our mandate of delivering affordable housing. Affordable housing is not possible without affordable housing financing. We believe that Capital markets play a crucial role in providing this service, and this also harks back to our third Organisational Sustainability."

He informed stakeholders that Shelter Afrique had a track record of leveraging the capital markets to raise funding for affordable housing and floated an FCFA 10 bn bond on the UEMOA, which was oversubscribed by 163%. In 2014 it ventured into the Kenyan Market with a KES 3.5 bn bond that was oversubscribed by 43% on the Nairobi Stock Exchange in 2013. 

"We want to bring that expertise to Nigeria. We plan to be an active issuer in the Capital Markets in Nigeria and Africa; this is a challenge that Development Financial Institutions and Multilateral Development Banks must rise to, deepening the Capital Markets." 

In addition, he said the focal point of Shelter Afrique's activities was Nigeria. Its first investment was a 1.4m facility in 1993 to a private developer. There was also the financing of the construction of Madonna University and Shelter Afrique Estate in Uyo. Nigeria was also the venue for its Annual General Meeting in 2016. He said since 1993, it has approved $191m for Nigerian counterparties. 

He added, "Currently, our investment appetite is to consider large-scale projects of nothing less than 1000 units. We have also been active in providing lines of credit to banks to bolster the provision of mortgages. Recently, we provided $10m to Wema Bank for this specific purpose. We also have a relationship with the former ARM Properties, now MIXTA and ASO Savings and Loans. We were also instrumental in the creation of the Nigerian Mortgage Refinance Company (NRMC) and are currently considering an equity investment in the Nigerian Mortgage Guarantee Company (NMGC)." 

The Acting MD of Shelter Afrique thanked the Federal Government, Ministry of Works and Housing, Ministry of Finance, Securities and Exchange Commission and the National Pension Commission (PENCOM) for the policy and regulatory support. 

He also acknowledged the following partners FSDH (Lead Issuing House), Joint Issuing Houses ARM Securities Limited, FCMB Capital Markets Limited and United Capital PLC.  Aluko & Oyebode and Banwo & Ighodalo are the solicitors to the Offer. United Capital Trustees and Registrars Limited and Cardinal Stone Registrars Limited are the Offer's Registrars. 

FSDH Merchant Bank Limited, Stanbic IBTC PLC, and United Bank for Africa Plc are the receiving banks.