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Portfolio/Mixta Nigeria I

NGN 4.5 billion credit enhancement guarantee for the first series of Mixta Nigeria’s bond programme. The guarantee increased the rating of the bond issue above the minimum threshold required by local insurance companies and pension funds, allowing Mixta Nigeria to raise financing for the development of its affordable housing strategy.

Mixta Nigeria
Tools
Nigeria

Overview

Date

January 2017

GuarantCo Guaranteed Amount

NGN 4.5 billion

Total Transaction Size

NGN 4.5 billion

Beneficiaries & Financing Partners

Bond holders

GuarantCo Benefits

Mixta Nigeria is a leading real estate development company in Nigeria. The company has a strong track record and diverse real estate portfolio, with operations spanning the residential, commercial, retail and leisure sectors of the Nigerian real estate industry.

In order to raise longer term financing for the development of its affordable housing strategy, Mixta Nigeria decided to issue a bond. Without GuaranCo’s support, Mixta Nigeria’s local bond rating would have been below the minimum threshold required by local insurance companies and pension funds to invest in private corporate bonds. Consequently, Mixta Nigeria turned to GuarantCo to credit enhance the bond, which was eventually issued with a local AAA rating. 

Development Benefits

According to the Centre for Affordable Housing in Africa (2016), Nigeria has a deficit of 17 million housing units for an estimated population of 182 million people. This scarcity of housing results in high prices and a shortfall of affordable housing. It is estimated that around 5,000 affordable houses will be built with the proceeds of the bonds guaranteed by GuarantCo and as a result over 24,000 people will have access to housing in Nigeria.

Mixta Nigeria anticipates that the rapid population growth in Nigeria, combined with a high rate of urbanisation will further increase aggregate demand for housing. Mixta Nigeria is confident that it has the capacity to not only improve conditions for the lower middle class but also to create a “snowball” effect, over time increasing the affordability of housing at all levels in Nigeria.

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