Family Homes Funds Limited through Family Homes Sukuk Issuance Program Plc – has successfully completed the issuance of N10,000,000,000 7 Year 13% Series 1 Ijara Lease Sukuk due 2028 (“Series I Sukuk”) under the N30,000,000,000 Sukuk Issuance Programme.
The Series I Sukuk is the first-ever SEC registered corporate Sukuk to be issued in Nigeria. It is also the first-ever corporate Sukuk certified by the Financial Regulation Advisory Council of Experts (FRACE) of the Central Bank of Nigeria. The transaction also represents Family Homes’ debut in the Nigerian Debt Capital Markets. The issuance was 2.1x oversubscribed.
The Book Build process for the transaction was launched on Friday, June 25, 2021, and was completed on Tuesday, July 6, 2021. The transaction was well received and attracted significant demand from a wide range of high value and quality investors including pension funds, ethical funds, fund managers, non-finance Islamic institutions, trustees, corporate and high net worth individuals. The total value of orders received during the Book Build was N21.3 billion (representing a 2.1 times oversubscription) of the intended N10 billion. The issuance was launched at a rental rate of 13.00% per annum. Notwithstanding current market dynamics and volatility, this debut transaction had tremendous support from the debt capital market.
The Series I Sukuk Issuance reinforces the Company’s commitment to facilitating the provision of affordable homes and diversifying its funding sources, as well as the resilience of the domestic debt capital market. Family Homes will deploy the net proceeds to finance and develop affordable homes for low-income earners.
Commenting on the Sukuk issuance, Femi Adewole, Chief Executive Officer of Family Homes said:
“We are very proud of this landmark transaction, which is the first-ever certified corporate Sukuk issued in Nigeria. The domestic debt capital market has given us the opportunity to further diversify our funding sources and provided the necessary support for our goal of providing affordable homes across Nigeria. The strong support for this transaction, given the challenging environment, is a reflection of the depth of the market, and investor confidence in Family Homes Fund’s long-term strategy and management team.
Family Homes Funds Limited is a quasi-government entity (owned by the Federal Government of Nigeria (FGN), via the Federal Ministry of Finance and The Nigeria Sovereign Investment Authority) established in 2016 and commenced operations in 2017, as part of the FGN’s Social Intervention Programme. Family Homes is a social housing financing fund aimed at addressing the housing deficit in Nigeria and improving the quality of life of low-income Nigerians through housing which is in line with the New Urban Agenda and the United Nations Sustainable Development Goals of promoting sustainable cities and communities, reduced poverty, good health and well-being, economic growth, and reduced inequalities. Family Homes evolved in response to the need to provide decent homes and accessible housing finance for lower-earning Nigerians while harnessing the job creation potential of the housing sector.
To date, Family Homes Funds has financed the development of at least 11,700 homes for low-Income earners across several states in Nigeria Including Delta, Ogun, Kano, Nasarawa, Kaduna, Yobe, Bauchi, Borno, Adamawa, and has created up to 64,000 direct and indirect jobs in the process. Family Homes Funds is also implementing the National Social Housing Programme (NSHP) of the Federal Government of Nigeria which aims to provide up to 300,000 homes to Nigerians on low income – the single largest investment in the history of Nigeria towards ensuring that Nigerians have decent homes. In addition to homes, the programme, which is the government’s economic and growth recovery plan in response to the adverse impact of the COVID-19 pandemic, will create up to 1,500,000 jobs and contribute to revitalizing local manufacturing of local building materials.
Over the next 4years, specifically through its affordable housing projects, the company aims to invest up to N1.3trn (US$3bn) in the development of 500,000 homes for people on low income. In the process, the Company also aims to create up to 1,500,000 jobs and enable homeownership through its creative products.