Shelter Afrique raises N46bn bonds to boost Nigeria’s housing supply

Shelter Afrique, a pan-African finance institution, has successfully raised N46 billion five and seven years’ tenure Naira-denominated bonds at 13 and 13.5 percent respectively to help plug Nigeria’s housing deficit and provide affordable housing.

The bonds issued in two tranches of N40 billion and N6 billion respectively. The first tranche of N40 billion was oversubscribed by 61 percent, hence the need to raise the additional N6 billion.

Kingsley Muwowo, acting managing director, Shelter Afrique, at the signing ceremony of the series 1, naira-denominated bond in Lagos on Monday 25 April, said that the accomplishment of the Naira-denominated bond is a demonstration of the financial sustainability, shareholder value and development impact, and organisational sustainability, which are Shelter Afrique organisational strategy.

“The organisation is not only meeting demand but solving a very real problem; how to address the forex challenges and bridge the financing gap in a robust market like Nigeria. 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,” Muwowo said.

According to Muwowo, the demand for affordable housing in Nigeria is huge and will continue as the government continues its plans to liberate the economy and retain capital. He said further that any organisation committed to addressing this challenge in a responsible manner is bound to see the growth of its balance sheet. So, this addresses two of our strategic pillars; organisational and financial sustainability.

He also disclosed that Shelter Afrique plans to be an active issuer in the capital markets across Africa. Accordingly, he said development financial institutions and multilateral development banks must rise to the challenge of deepening the capital markets on the continent. “For us as a management team and our organisation, the significance of today go beyond simply signing documents; it is a realisation of our strategic vision,” Muwowo said.

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“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. It is apparent that affordable housing is not possible without affordable housing financing,” Muwowo said.

Speaking further on the mission of Shelter Afrique, Muwowo said the company aims to be the pre-eminent provider of financial, advisory and research solutions towards addressing the severe need for decent and affordable housing in Africa and achieving sustainable developmental impact through public and private partnerships.

“This guides most of our activities and is the focal point of our activities in Nigeria. We have a 29-year history with Nigeria; our first investment was a 1.4 million facility in 1993 to a private developer,” Muwowo said.

According to him, the company has been active in providing a line of credit to banks to bolster the provision of mortgages. “Currently our investment appetite is to consider large-scale projects of nothing less than 1000 units. 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,” Muwowo said.

FSDH is the lead issuing house, while other joint issuing houses are ARM Securities Limited, FCMB Capital Markets Limited and United Capital PLC. The receiving banks are FSDH Merchant Bank Limited, Stanbic IBTC PLC and United Bank for Africa PLC.