Shelter Afrique bond records 61 per cent over subscription
Culled from guardian.ng
L-R: Acting Managing Director, FCMB Capital Markets Limited, Abimbola Kasim; Managing Director, FSDH Capital Limited, Tolu Osinibi; Acting Managing Director, Shelter Afrique, Kingsley Muwowo and Managing Director, Investment Banking, United Capital Plc, Gbadebo Adenrele during a press conference on Shelter Afrique Financing Affordable Housing for Africa in Lagos
Shelter Afrique has announced that the N40 billion housing bond was 61 per cent oversubscribed, showing a growing appetite for housing bonds among investors.
At the formal signing ceremony yesterday, the company said it has raised the bond to N46 billion following the interest shown by investors.
According to the company, the proceeds would be deployed into mass housing development by tier-one real estate developers, and provide lines of credit.
FDSH Capital Limited acted as the lead issuing house while ARM Securities Limited, FCMB Capital Markets Limited and United Capital Plc acted as joint issuing houses for the bond issuance.
The Acting Managing Director of Shelter Afrique, Kingsley Muwowo, who confirmed this in Lagos, said the bond, which has five and seven years tenure with 13 per cent and 13.5 per cent interest rates respectively.
Muwowo said the organisation has received a commitment of about N38 billion from the off-takers and is at the stage of signing an agreement for disbursements.
He expressed hope that disbursement would start from the first week of May and would be rounded off in October. While 60 per cent of the bond will target housing development in Lagos, 40 per cent will target the Abuja market.
According to him, Shelter Afrique is excited about the development in Abuja. He stressed that the Ministry of Works and Housing has already allocated 100 hectares of land to the organisation for housing development in the city and that part of the bond proceeds would go into the project.
Muwowo said the company opted for naira-denominated bond go guide against exchange rate volatility risk.
He stressed that the significance of the signing ceremony included realisation of a strategic vision that rests on three distinct pillars – financial sustainability, shareholder value/development impact and organisational sustainability.
He said: “I believe the accomplishment of this naira-denominated bond is a demonstration of all three. The organisation is not only meeting demand but solving a very real problem. For some time, our advocacy has always been that the capital market was the answer and by closing this transaction, we have demonstrated shareholder value and impact.”
FSDH is the lead issuing house to be supported by ARM Securities Limited, FCMB Capital Markets Limited and United Capital Plc.
Source: guardian.ng
