Family Home Fund Completes N10bn Sukuk Issuance

Emmanuel Addeh

Family Homes Funds Limited (FHFL) through the Family Homes Sukuk Programme Plc has successfully completed the issuance of a N10 billion seven-year 13 per cent Series 1 Ijara Lease Sukuk due in 2028, under its N30 billion Sukuk Issuance Programme.

The company said the Series I Sukuk is the first ever SEC-registered corporate Sukuk to be issued in Nigeria and the first corporate Sukuk certified by the Financial Regulation Advisory Council of Experts (FRACE) of the Central Bank of Nigeria.

According to the FHFL, the transaction also represents its debut in the Nigerian debt capital market, while the issuance was 2.1x oversubscribed.

A release by FHFL Company Secretary, Franklin Ezeagwu, noted that the book building process for the transaction was launched on June 25, 2021, and was completed on July 6, 2021.

It stated that 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 company said the total value of orders received during the process was N21.3 billion (representing a 2.1 times oversubscription) of the intended N10 billion, while the issuance was launched at a rental rate of 13.00 per cent per annum.

“Notwithstanding current market dynamics and volatility, this debut transaction had tremendous support from the debt capital market,” it said.

FHFL noted that 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,” said the company.

Commenting on the development, Chief Executive Officer of FHFL, Femi Adewole, described it as a landmark and lauded all those who contributed to the success of the historic initiative.

“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,” he said.

The company is a quasi- government entity (owned by the federal government of via the ministry of finance and the Nigeria Sovereign Investment Authority (NSIA). It was established in 2016 and commenced operations in 2017 as part of the government’s social intervention programme.

It’s a social housing financing fund aimed at addressing the housing deficit in Nigeria and improving the quality of life of low-income Nigerians and has financed the development of at least 11,700 homes for low-Income earners across several states in Nigeria and created up to 64,000 direct and indirect jobs in the process.