Namibia MAC to debut $250 million bond offer to finance country’s mortgage market
Namibia Mortgage Acceptance Corporation ("Namibia MAC"), a subsidiary of Africa Growth Corporation has announced its intention to launch a Regulation D (506(c)) debt offering as it seeks to secure funds through accredited investors to facilitate access to financing solutions and promote sustainable, responsible homeownership for middle-income, and emerging middle-income government workers in Namibia.
Namibia has maintained an investment grade sovereign credit rating according to Moody's and Fitch since 2005.
Namibia MAC will seek to place a $250,000,000 bond program in initial tranches to accredited investors to match the monthly mortgage funding demand in Namibia. The Company expects to return to investors an initial annual yield of approximately 9 percent in US Dollars, passed through from the underlying Namibian mortgages that are created.
The Company anticipates the bonds to be repayable in 2024, with a minimum investment of $10,000, and an intended listing on the New York Stock Exchange post placement.
In addition to asset-backed protection, the mortgages receive significant financial support from the Government of Namibia through a program offered exclusively to its employees. The Namibian government withdraws mortgage payments directly from the mortgage payers' paychecks -- though not more than 33 percent of their gross income -- so investors can have confidence in the mortgage repayment process. Namibia MAC's bond offering will be syndicated to broker dealers across the U.S and internationally.
The offering will also be made available through the Company's website www.namibiamac.com, where the Private Placement Memorandum and Accredited Investor Questionnaire will be located.
Nambia MAC estimates that the sub-Saharan Africa mortgage finance shortage is a $2 trillion market opportunity. Currently, only 2 percent of Sub Saharan African families have mortgages today. The current market demand in Namibia alone necessitates the immediate creation of approximately 300,000 mortgages (equating to a financing volume of $10 billion to $15 billion).
Furthermore, with a rapidly growing population and a robust urbanization rate of 4.43 percent, demand for affordable housing in Namibia is expected to remain strong for the foreseeable future.
"This represents an extraordinary opportunity to improve the quality of life in the region by enabling the creation of affordable and proper housing conditions. This initial offering will be the first step of many to provide meaningful private financing solutions to Namibia and then later on to the broader sub-Saharan mass housing market, in correlation with the commercial and profit-driven opportunities available through financing these mortgages. We believe that this is an excellent opportunity to help resolve a massive social issue while generating significant value for our bondholders and shareholders," said Christopher Darnell, Chairman and CEO, Africa Growth Corporation.
"Though the scale of the housing shortage is considerable, we anticipate raising a significant portion of the necessary capital over time through continual bond and equity offerings, acting as a seamless conduit for capital to flow between Wall Street and a wide variety of countries in sub-Saharan Africa. To provide some perspective of the scale of the market opportunity we are addressing, the mortgage on a single office tower, (9 West 57th Street in New York City) is reported to be $1.2 billion, which is more than all the mortgages that reportedly exist in Angola, Cameroon, Mozambique, Uganda, Zambia and Zimbabwe combined -- representing a combined population of nearly 150 million people. It's a historic investment opportunity," said Brenton Kuss, Chief Financial Officer, Africa Growth Corporation.