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HomeCapital MarketShelter Afrique’s N46b bond issuance  oversubscribed by 60.7%

Shelter Afrique’s N46b bond issuance  oversubscribed by 60.7%

Shelter Afrique, the pan-African development finance institution exclusively dedicated to housing finance in Africa, has said its maiden N46 billion ($110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance was oversubscribed by 60,7 per cent.

The dual tranche bond, issued  in Nigeria’s capital market under its N200 billion ($481.3 million) saw the  order book peaking at N64.3 billion ($154.6 million).

This enabled Shelter Afrique to exercise the ‘green shoe’ option and raise an additional N6 billion ($14.4 million) more than the original N40 billion plan ($96.3 million). 

On the back of an AA rating from GCR Ratings and an A+ rating from Agusto & Co, the bond issuance attracted participation from a diverse range of institutional investors, including pension funds, banks, and insurance companies. 

The oversubscription rate demonstrates investors’ confidence in Shelter Afrique’s mandate to enable housing development in Africa, coupled with the institution’s strong management team, business strategy and credit profile. 

Announcing the result, Shelter Afrique’s Acting Managing Director, Kingsley Muwowo said: “This is the first time Shelter Afrique is tapping the Nigerian debt capital market and the positive market reception is a clear indication of investor confidence in our long-term value proposition for the Nigerian housing market. We would like to assure our investors that we shall put the proceeds of the bond issue into good use that will ensure that more value is created for them.”

Speaking at the signing ceremony held in Lagos, Nigeria, the Managing Director of FSDH Capital Limited, Mr. Tolu Osinibi, said: “FSDH Capital is pleased to have advised Shelter Afrique on its successful debut bond issuance in Nigeria’s capital market.

Shelter Afrique continues to play a pivotal role in housing development across Africa and the success of the bond issuance will encourage other supranational financial institutions to tap Nigeria’s debt capital market for their Naira funding needs. We thank the investor community for their support on the bond issuance. We also thank the Board and management of Shelter Afrique for trusting us with this milestone transaction, and their commitment and dedication throughout the process.”

The 5-year Tranche A bonds priced at 13.00 per cent and the 7-year Tranche B bonds priced at 13.25 per cent. The tenors of the bonds are aligned with the institution’s housing finance strategy and long-term plans in Nigeria. Shelter Afrique will use the bond proceeds to fund mass housing development by tier 1 real estate developers, and to provide lines of credit.

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