As part of its efforts to provide additional liquidity to the country’s mortgage market and give more Nigerians the opportunity to own homes, Nigeria Mortgage Refinance Company Plc (NMRC) has announced the completion of its ₦10billion 7.20% series 3 fixed rate bonds due in 2027, under its ₦440billion Medium Term Note Programme.
The bond facilitated by DLM Capital Group as the Financial Adviser and Issuing House, was well received by investors, and was subscribed 3.28 times the projected amount. This has been described to be the highest subscription for a Nigerian bond so far.
Mr. Kehinde Ogundimu, the Managing Director/CEO of NMRC at the bond signing ceremony held in Lagos explained that “This series 3 bond issuance goes to further reinforce our commitment to encourage, promote and facilitate home-ownership in Nigeria. This issuance gives an opportunity for people like you and I to take mortgage loans at an affordable rate and buy houses”.
Mr. Ogundimu also stated that “One of the biggest challenges we have in the mortgage industry is affordability, but with this rate at 7.20%, I will expect that from this issuance, there will be a substantial decrease in the mortgage rate to the ultimate mortgagors going forward.
“Other things like cost of houses is also expected to drop as this interest rate will offer some cost reduction to developers, unlike in the past where they had to borrow money for short periods at over 30% interest rate” he added.
DLM Capital Group, through its subsidiary, DLM Advisory, played the role of Financial Adviser and Issuing house for the bond issuance. They also expressed their satisfaction with the success of the bond and were optimistic that it would go a long way in helping the average Nigerian access mortgages loans.
Mr. Sonnie Ayere, the Group CEO of DLM Capital Group, who was also present at the signing ceremony said “We are really excited to have played an important role in this bond issuance and are pleased at the success recorded.
“The bond which was aimed at ₦10billion was oversubscribed and we received commitments for ₦32.8billion, this I believe is the highest subscription for a Nigerian bond thus far. This indicates a strong investor appetite for the long-tenured asset and reemphasises the market’s confidence in the operating model of NMRC”.
“Also, we are cognizant of the housing situation in Nigeria and the challenges faced by Nigerians in accessing mortgage loans due to its high rates, so helping NMRC to achieve this gives us a sense of fulfilment as it will immensely help ordinary Nigerians access mortgage loans at low rates and ultimately help them buy their own homes” he concluded.
NMRC was established to bridge the funding cost of residential mortgages and promote the availability as well as the affordability of good housing to Nigerians by providing increased liquidity in the mortgage market through the mortgage and commercial banks.
The company is driven by substantial private sector participation consisting of commercial banks, primary mortgage banks, insurance companies, private equity investors and international financial institutions through the Ministry of Finance with the public purpose of developing primary and secondary mortgage markets, and raising long-term funds from both domestic capital market and foreign markets to provide accessible and affordable housing in Nigeria.