FMBN to issue N12.9b mortgage bond

THE Federal Mortgage Bank of Nigeria (FMBN) has concluded plans to issue bond to refinance mortgages worth over N12.9 billion.To this end, the bank has appointed a new lead issuing house which is expected to issue this 2nd tranche bond immediately the yield rates on the local bond market fall to more acceptable levels.Minister of Land, Housing and Urban Development, Ms Amma Pepple, who disclosed this yesterday in Abuja explained that government bonds are attracting rates of between 16-17.5percent which are extremely high for transactions of this nature.She said that FMBN in 2007, commenced a N100 billion mortgage-backed bond to refinance mortgages for the acquisition of non-essential federal government owned residential houses sold in the Federal Capital Territory adding that the 1st tranche of N26 billion, covering 9,575 individual mortgages was successfully issued.According to the minister, the bond has retained 'AAA' rating, stressing that not only that it is being backed a federal government guarantee, but also, for having recorded no defaults in payment obligations to investors to date.Pepple, who observed that the major focus of the FMBN is to integrate the informal sector into the National Housing Fund using cooperative housing structures said, ' This comprises low-income earners struggling to earn their daily living outside formal employment structures. They include the bricklayers, roadside mechanics, market women, artisans and farmers. These are crop of people who are in need of affordable housing and can be more productively channeled to become stakeholders in the society when they are decently housed and economically integrated'.
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