The Nigeria Mortgage Refinance Company (NMRC) is planning a second tranche bond issue with which it intends to raise an additional N20 billion in order to create some more long-term funding for mortgage lenders, BusinessDay gathers.
The NMRC board is yet to endorse the proposed sum, but its reliably proposed bond would be issued before the end of third quarter 2016. This issue is coming barely one year after the company’s successful first showing in the market last year to raise N8 billion listed on the FMDQ OTC.
The first tranche of the Series-1 of NMRC 15- year 14.9 percent fixed rate equally came under a N140 billion medium-term note programme due in 2030. The bond is part of government’s effort to finance the nation’s increasing housing deficit.
Charles Inyangete, NMRC managing director, said on Tuesday that out of the N8 billion raised initially, the company had injected in excess of N6 billion into the mortgage market and had “big designs, and looking to injecting substantially more.”
Inyangete was speaking in Abuja at the signing of memorandum of understanding between the NMRC and National Bureau of Statistics (NBS) on data generation for Nigeria’s housing sector.
Inyangete announced that NMRC had so far refinanced several mortgages, creating several hundreds of mortgages in the process, saying, “As we speak, we are looking at a 5,000 mortgage refinancing transaction which we are evaluating for going to the market at the end of this quarter.
“We refinanced nine transactions including five mortgage entities as well a commercial bank in the last few months. We are actually planning on going to the market again for our second tranche bond issue.”
The NMRC/NBS MoU was to develop the Nigeria mortgage information portal that would enable reliable data for the housing market, as well as home ownership and financing in the country.
Speaking at the event, Inyangete said this was a critical resource because it would enable NMRC build knowledge to drive policy, make critical decisions for the sector and also enhance its operations.
“We expect through this project to provide empirical data that would enable the mortgage market to operate in a way that is serves a s tool for analysis from a macro perspective even from a sectional or sectoral analysis,” he said at the brief event.
He further indicated that the NMRC’s target is to become the dominant housing partner in Nigeria by bringing liquidity to the mortgage lenders and in the process create stability, greater access and more affordable with longer tenured funds.
Yemi Kale, statistician-general of the federation, said the MoU was a critical step towards providing accurate information on the country’s housing sector, noting, “There is always a correlation between success of a policy and the amount of critical data that supports that policy decision.”
But Inyangete regretted the biggest challenge of the mortgage sector is even to find an affordable home.
The MD pointed to the fact that the NMRC is tackling these challenges through a module market and foreclosure law to help investors understand the market and come in.
“We have developed a process through a document that has to pass through the various states and that is what we are doing,” he announced.
“We have signed MoU with a do few states so far and that process would allow us to level the playing field and to make it easier for investors to know that the environment is one that they understand the purpose of making their investments.”
He assured that the NMRC loans were safe because the company uses the uniform underwriting standards.
“First of all, the loans that they bring to us to refinance must meet that uniform underwriting standards. “That is the first thing that levels the playing field,” he noted.
He again reassured that the NMRC would not refinance any Mortgage that does not meet standards and that the lenders who anticipate funding from the company must ensure their business is run to a certain quality before they can get refinancing.
“So those are the two first things that give assurance and that the rating institutions would have to provide a rating as part of the process.”
He also disclosed that so far, the NMRC has seen no default since it started refinancing.
Onyinye Nwachukwu
