• Records 200% over-subscription
The Nigeria Mortgage Refinance Company (NMRC) said it has completed its N11billion 13.80 per cent Series 2 Bond Issuance under its N440 billion Medium Term Note Programme. It said it is part of its primary mandate of providing liquidity to the country’s mortgage market.
The net proceeds of the exercise will be used to refinance eligible mortgage loans originated by the participating mortgage lending banks. This is coming on the heels of its inaugural N8 billion 14.9 per cent Series 1 Bond issue in July 2015 – which was fully deployed towards refinancing legacy mortgage loan portfolios of the participating eligible member-mortgage lending banks.
The Series 2 Bonds are unconditionally and irrevocably guaranteed by the Federal Government of Nigeria (FGN) and thus ascribed an “AAA” rating by both Global Credit Rating Co. and Agusto & Co. The order book was subscribed by over 200per cent. The bonds were subscribed to by domestic investors with the Pension Fund Administrators (PFAs) representing over 70 per cent of the investors. The bonds were priced at a spread of c.74 basis points above the interpolated 15-year FGN yield of 13.06 per cent as at the opening of book building.
The Managing Director, NMRC, Mr. Kehinde Ogundimu, said: “The bond issuance reinforces our commitment to encourage and promote homeownership in Nigeria by linking the capital markets with the housing sector and establishing an operating and viable secondary mortgage market to support the primary mortgage market.”
He said NMRC remains committed to transmitting the full benefit of the pricing efficiency achieved in its funding cost to home borrowers through the participating primary mortgage lenders, thereby lowering costs and driving activities that will deepen the mortgage market.
Chairman of Dunn Loren Merrifield Advisory Partners, Mr. Sonnie Ayere, stated that the high subscription level for the Series 2 bonds is indicative of the strong investor appetite for the long-tenured asset class and underscores the confidence reposed in the underlying principle and operating model of NMRC.
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