Shelter Afrique, the pan-African development finance institution exclusively dedicated to housing finance in Africa, has completed its debut ₦46 billion (US$110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in Nigeria’s capital market under its ₦200 billion (US$481.3 million) bond issuance programme.
The dual tranche bond issuance was 60.7% oversubscribed with the order book peaking at ₦64.3 billion (US$154.6 million), enabling Shelter Afrique to exercise the “green shoe” option and raise an additional ₦6 billion (US$14.4 million) more than the original ₦40 billion plan (US$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, it was gathered, demonstrates investors’ confidence in Shelter Afrique’s mandate to enable housing development in Africa, coupled with the institution’s appreciable management team, business strategy and credit profile.
The five-year Tranche A bonds priced at 13.00% and the seven-year Tranche B bonds priced at 13.25%.
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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