By Chukwuma Umeorah
AG Mortgage Bank plc has successfully completed the first tranche of N1 billion of its N2 billion tier-2 capital issuance through its Special Purpose Vehicle -AG Funding SPV Limited.
The Managing Director of AG Mortgage Bank, Ngozi Anyogu, during the signing ceremony at the weekend, noted that the 17.5 per cent seven-year fixed rate note issuance is not only a strategic move to fortify the bank’s financial position, but will be used to support several of its project nationwide aimed at closing the housing deficit gap in the country.
He said: “This capital raise has heightened our capacity as a primary mortgage institution. It will also go a long way to ensure that the bank can run its operations of providing mortgage loans and financing for developers undertaking a myriad of real estate projects.”
In addressing Nigeria’s housing deficit, Anyogu noted that the bank adopts a multi-faceted approach, funding construction on the supply side and creating demand through effective engagement with the public on the benefits of mortgages while providing convenient payment plans. “The bank is actively involved in projects in Lagos, Abuja, Enugu, Port Harcourt and other regions in collaboration with partner developers and we look forward to launching several other projects by 2024,” he said.
Anyogu emphasised the bank’s intention to be a household name in the housing sector and mortgage subsector through extensive collaboration arrangements. “Our pipeline project is in the region of N40 billion and we have quite a lot of things we need to do as we are not looking at funding these projects from customers’ deposits. We have gone into extensive and expansive collaboration arrangements to reach out to the market to fund housing for Nigerians. We would close this gap. It takes innovation and an intentional approach to make it happen,” he affirmed.
WealthBridge Capital Partners Limited, acting as the arranger for the transaction, played a pivotal role in facilitating the issuance. The Group Managing Director at WealthBridge Group, Ahmed Lawal, reiterated commitment to supporting AG Mortgage in its quest to provide superior services and create assets for its clients in innovative ways.
Lawal stated, “We have served the bank in an arranger’s capacity previously on a Note Issuance of N1.5 billion to fund the construction of 108 housing units in Enugu in partnership with Enugu State Housing Development Corporation, and AG Mortgage Bank successfully redeemed the Notes with all investors fully repaid.
“We are positive that this Note issuance will enhance the current base of AG Mortgage Bank’s business lines and assist in absorbing any economic shocks or business uncertainties.”
Lawal further highlighted the importance of Public-Private Partnership (PPP) in closing the housing gap in Nigeria.
He called on the government to strengthen partnerships with relevant stakeholders and create policies that facilitate the activities of housing developers and strengthen mortgage and financial institutions.
“The Federal Ministry of Housing and Urban Development is doing a great job in this aspect. However, regardless of what is being done, people need to be able to afford these houses, which is where institutions like AG Mortgage come in to provide an affordable and sustainable payment plan for people to own their dream houses.”