Nigeria’s mortgage company plans a bond sale

NIGERIA’S state-backed mortgage refinancing company planned to sell 440 billion naira (R26.8bn) of bonds as it sought to expand access to housing funds, its chief executive said.

The Nigeria Mortgage Refinance Company (NMRC) would start with the sale of 10bn naira of debt next week, the first step in a quarterly programme to raise 140bn naira, Charles Inyangete, the chief executive, said earlier this week in the capital, Abuja. That was “part of a bigger programme” over a fiveyear period, he said.

The 15-year bonds would be used to refinance existing mortgages that met specified underwriting requirements and would be listed on the Financial Market Dealers Association trading platform, Inyangete said.

Rising demand

Nigeria, Africa’s most populous nation with more than 170 million people, seeks to expand access to housing finance to help cut a deficit of 17 million houses.

The continent’s largest economy needs investment of 3.5 trillion naira to build 780 000 housing units annually to help meet rising demand, according to Inyangete.

NMRC was rated BBB+ by the Johannesburg-based Global Credit Rating, which provides debt evaluation and ratings across Africa, while its proposed bond, now in the process of price discovery, was rated AAA, as it was backed by a Nigerian government guarantee, he said.

While the NMRC had been able to provide a uniform underwriting standard for the country’s mortgage market, the absence of a foreclosure law was hampering quicker expansion, Inyangete said.

The government-controlled mortgage company plans to sell shares to the public before the end of the year to dilute its ownership. – Bloomberg