Nigeria Announces Prices for $3bn Eurobond

The Federal Government on Monday announced the pricing of its offering of $3bn dual series notes under its $4.5bn Global Medium Term Note programme. The notes, according to a statement by the Minister of Finance, Mrs. Kemi Adeosun, comprise a $1.5bn 10-year series and a $1.5bn 30-year series.

She said the notes represented Nigeria’s fourth Eurobond issuance, following issuances in 2011, 2013 (two series) and earlier this year. In the statement signed by her Media Adviser, Mr. Oluyinka Akintunde, the minister said the 10-year series would bear interest at a rate of 6.5 per cent, while the 30-year series would bear interest at a rate of 7.625 per cent.

These, it noted, would be repayable with a bullet repayment of the principal on maturity. The offering, which attracted significant interests from leading global institutional investors, is expected to be closed on or about November 28, 2017, subject to the satisfaction of various customary closing conditions. When issued, the notes will be admitted to the official list of the United Kingdom Listing Authority and available to trade on the London Stock Exchange’s regulated market.

The statement said the Federal Government might apply for the notes to be eligible for trading and listed on the FMDQ OTC Securities Exchange and the Nigerian Stock Exchange. The statement said the pricing was determined following a roadshow led by Adeosun; Minister of Budget and National Planning, Senator Udo Udoma; Governor of the Central Bank of Nigeria, Godwin Emefiele; Director-General, Debt Management Office, Ms. Patience Oniha; and Director-General, Budget Office of the Federation, Mr. Ben Akabueze.

Adeosun stated that the Federal Government would utilize the proceeds of the notes to fund the approved budgetary expenditure and for refinancing of domestic debt, as might be applicable. The statement quoted her to have said, “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues, while reducing waste and improving the efficiency of government expenditure.

“Our economy is beginning to recover, Gross Domestic Product having returned to growth in 2017, but we must maintain the momentum behind our investments in order to further drive growth. That is why we are, and will continue to focus investment on the enabling infrastructure we need to broaden economic productivity.”

The minister added, “Successfully extending out debt profile in the international market to 30 years is a key element of that strategy as it establishes a basis for the longer-term financing required for transformational infrastructure investment.

“As we have always stated, we are progressively replacing debt with revenue, which is reflected in the 2018 budget proposal. We are establishing the building blocks for inclusive growth and beginning to see the results of the hard decisions that have been made to reset our economy appropriately.”


Also commenting on the notes’ pricing, the statement quoted Oniha to have said that with the successful pricing of the fourth Eurobond, Nigeria had become one of the few African issuers whose securities had attracted strong investor interest among institutional investors across the globe.

She stated, “This time, Nigeria issued a new 10-year bond at a yield of 6.5 per cent and a 30-year benchmark priced at a yield of 7.625 per cent, which despite the longer tenure, remains cheaper than our 15-year issuance earlier this year.

“The 30-year is a landmark as the tenor represents the first by a sub-Saharan country other than South Africa and importantly, establishes the basis for long-term infrastructure funding, which is a priority for this government.” Oniha expressed satisfaction with international investors’ recognition of Nigeria’s huge potential.

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