Stakeholders in the housing finance
industry have inaugurated the Mortgage Warehouse Funding Limited, a
special purpose company set up to provide short-term local currency and
competitively priced funding to mortgage banks.
The MWFL, a private-sector driven
initiative to enhance mortgage banks’ origination capacity, was
incorporated in December 2014 and initially sponsored by a group of
eight-member mortgage banks.
The initiative is mobilised by the
Mortgage Bankers Association of Nigeria as well as other parties,
including the Nigeria Mortgage Refinancing Company Plc as liquidity and
off-take provider; CitiHomes Finance Company Limited as programme
manager; Lion’s Head Global Partners, London through its African Local
Currency Bond Fund as the initial subordinated commercial paper
subscribers; and Dunn Loren Merrifield Advisory Partners as financial
adviser and arranger.
The stakeholders said the activities of
MWFL would complement those of NMRC, as it would serve to provide
short-term and interim funding for mortgage origination financing
through the issuance of high quality investment grade rated senior and
subordinated commercial paper notes under an initial N20bn programme
currently undergoing registration at FMDQ OTC.
According to them, the proceeds will be
used to fund a percentage of its member mortgage banks’ pipeline of
pre-qualified NMRC conforming mortgage loans.
The Head, Nigeria Housing Finance
Programme, Central Bank of Nigeria, Mr. Adedeji Adesemoye, said the
introduction of MWFL into the mortgage eco-system was a laudable
development that would help both the mortgage banks and the construction
industry.
The President, MBAN and Director on the
boards of both NMRC and MWFL, Mr. Niyi Akinlusi, stated that the
initiative was expected to significantly increase the fire power
available to mortgage banks for their daily operations.
“With the successful completion of this
landmark issue, MWFL will connect the Nigerian mortgage market currently
plagued with low deposits level and high cost of alternative sources of
funds to the money market by efficiently intermediating short-term
funds from the money markets towards the provision of housing finance in
Nigeria,” he said.
The Chief Executive Officer, NMRC, Prof.
Charles Inyangete, said the MWFL was part of the economic housing model
being put in place to create an end to end financing of the entire
mortgage process.
The Chairman, MWFL, Mr. Sonnie
Ayere, said, “The inauguration of this conduit will see us begin to
de-risk construction finance as MWFL becomes the funding source of the
off-take often required by commercial banks to fund developers.”
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