SUCCESSFUL ISSUE OF N11BILLION SERIES II BOND
In line with its primary mandate of providing liquidity to the country’s mortgage market to promote home ownership, the Nigeria Mortgage Refinance Company (NMRC) successfully completed the issuance of N11billion 13.80 per cent Series 2 Bond Issuance under the N440 billion Medium Term Note Programme. The order book was subscribed by over 200per cent. The net proceeds of the bond issue will be used to refinance eligible mortgage loans originated by participating mortgage lending banks.This is coming after NMRC’s maiden N8 billion 14.9 per cent Series 1 Bond issue in July 2015 that was utilized to refinance legacy mortgage loan portfolios of member mortgage lenders. 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. Domestic investors were the primary subscribers to the bond with the Pension Fund Administrators (PFAs) constituting 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.
Commenting on the development, the Acting Managing Director, NMRC, Mr. Kehinde Ogundimu “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.”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. Chief Executive of StanbicIBTC Capital Limited, Funso Akere commended the management of NMRC for giving the issuing Houses a free hand to guide the process, adding that “the success of the bond reaffirms the availability of long term funding to support NMRC’s drive to promote affordable housing ownership in Nigeria. StanbicIBTC Capital is delighted to have supported NMRC in achieving this successful bond issuance”.
NMRC COLLABORATES WITH IFC TO LAUNCH THE EDGE PROGRAM IN NIGERIA.
NMRC collaborated with the International Finance Corporation (IFC), a member of the World Bank Group, along with the consortium of thinkstep-SGS to introduce and promote implementation of EDGE Certification to the Nigerian construction industry. As a first step, NMRC, IFC and thinkstep-SGS, the certification provider for EDGE in Nigeria, held two workshops in Lagos and Abuja to educate industry stakeholders about the benefits of adopting EDGE. An innovation of IFC, EDGE (Excellence in Design for Greater Efficiencies) was created to respond to the need for a measurable solution to prove the financial case for building green and to help jumpstart the proliferation of green buildings. Research and implementation in other parts of the world show that building green has many benefits. Green buildings are smart buildings that guarantee about 35 percent lower carbon emissions and decrease in water use by 30 to 50 percent. They become even more desirable considering that global water consumption has grown at more than twice the rate of population increase in the last century and, in developing countries, this will increase by another 50 percent by 2025. According to IFC, “By 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world’s population could live under water stress conditions”.
Furthermore, green buildings also provide 50 to 90 percent cost saving in waste generation; are more comfortable, healthier, return higher productivity rates and have a higher resale value. Commenting on the development, Dr. Chii Akporji, NMRC’s Executive Director for Policy, Partnerships and Business Development said “Building green leads to reduction of operating and energy costs (lower utility bills), higher valued real estate and profits (greater return on investment), improvement of employee productivity (reducing sick building syndrome), extended life of buildings, optimization of life-cycle economic performance and less vulnerability to fluctuating energy prices”.
Through the partnership, NMRC and IFC will work together to promote sustainable design practices in Nigeria. This will include NMRC recommending EDGE certification to clients to increase the value of their green properties. In her remarks, Eme Essien Lore, IFC Country Manager, Nigeria stated that “Going green and affordability are not mutually exclusive – both are possible. We know from our global experience that we do not have to give up one to achieve the other. What we need is a way to put buildings onto a greener path with solutions that are sensible in the Nigerian context. EDGE can help accomplish that.”Eme Essien Lore further stated that green building presents investors and property developers in Nigeria with at least, a $4.5 billion investment opportunity to latch on within the next seven years to 2025.