Mixta Real Estate Plc has just listed its N4.4billion, 17 per cent guaranteed fixed rate bond on The Nigerian Stock Exchange (NSE), increasing the number of corporate bonds on Africa’s third largest bourse to 25.
Formerly known as ARM Properties Plc, Mixta is a leading real estate development company in Nigeria, with operations in the residential, commercial, retail and leisure sectors of Nigerian real estate industry.
The company plans to use 8 per cent of the proceeds from the bonds issue to refinance its debt and 20 per cent to complete its house and project.
Kola Ashiru Balogun, chief executive officer of the real estate giant said that the listing of the bond affirms the company’s positive outlook regarding the collaboration between the Nigerian Capital Market and the country’s real estate development. He said that the partnership will create a valuable investment opportunity for the institutional investors and provide accommodation for the people.
“What we have been focusing on for the past 10 years of our existing here in Nigeria is that in the affordable houses segment, we have successfully delivered about 5 thousand houses units,” said Balogun in a media interview in Lagos on last week. “What we are planning to do with this program is to increase our capacity to increase it to at least 10 thousand units over the next 5 years.”
The Mixta Bond will mature on January 31st, 2022. Industry experts say that the coupon on the bond, at 17 per cent, reflects a costly borrowing rate even though it is potentially cheaper than bank rates.
Balogun said that the bond rate is not costly given that Mixta has adopted a long term perspective of the market unlike other developments that typically have a short term vision of the market.
“Yes, the cost of this bond at 17 per cent is quite high but there are alternatives that 20 something per cent with the bank is something we are not willing to consider.”
“And what this even does for us is that it actually helps us reduce our cost further because we actually refinancing some of the existing instrument that we have with the commercial banks into this bond.”
Mixta has been partnering with the Nigerian Government on the best approach to affordable housing. Balogun said that the company has been advising the government in terms of how to implement the affordable housing project, bearing in mind pertinent the concept of ‘Social House’.
“We are active in that sector too so we continue to produce houses that fit into peoples wallet.”
Innocent Unah and Bunmi Banjo
