Family Homes Funds issues N10bn bond — Nigeria’s first corporate Sukuk

The Family Homes Funds Limited has issued a seven-year N10 billion corporate Sukuk, the first ever in the country. 

This is the first Sukuk to be registered by the Securities and Exchange Commission (SEC) and certified by the Financial Regulation Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN).

The development marks Family Homes Funds debut in the country’s debt capital markets.

The issue for a seven-year and 13 percent bond will be due in 2028 under Family Homes Fund N30 billion Sukuk programme.

“The issuance was 2.1x oversubscribed,” Franklin Eseagwu, company secretary, said in a statement on Thursday.

“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.”

Eseagwu said the move by the company reinforces its resolve to provide affordable housing for Nigerians.

“Family Homes will deploy the net proceeds to finance and develop affordable homes for low-income earners,” he said.

At the ceremony, Femi Adewole, chief executive officer (CEO) of Family Homes, said the debt capital market had allowed the company to diversify its funding.

“We are very proud of this landmark transaction, which is the first ever certified corporate Sukuk issued in Nigeria,” Adewole said.

“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.”

Sukuk is a bond that complies with Islamic religious law, commonly known as Sharia.