International Investors oversubscribe Nigeria’s Eurobonds offer in Excess of $9.5bn

By Tony Obiechina                     International investors on Wednesday in London, indicated interest in Nigeria’s economy by over subscribing  the country’s Eurobonds offer in excess of $9.5 billion.
The federal government had announced price offering of $ 2.86 billion aggregate principal amount of triple series notes under its global medium term note programme before international investors.

A statement issued last night in Abuja by Mr Paul Ella Abechi, Special Adviser (Media & Communication) to Finance Minister, Mrs Zainab Ahmed on the latest  Eurobond Road Show in London said  the  offering  attracted significant interest from leading global institutional investors with a peak combined order book of over US$9.5 billion, reflecting  over-subscription of more than three  times and demonstration  of  on going   confidence of international capital market investors in Nigeria’s investment environment.

The  Notes according to the statement,  comprise $1.18 billion 7-year series, $1.00 billion 12-year series and a $750 million 30-year series.

The 7-year series will bear interest at a rate of 7.625%, while the 12-year series will bear interest at a rate of 8.75%, and the 30-year series will bear interest at a rate of 9.25%. Each to be repayable with a bullet repayment of the principal on maturity.
The offering is expected to close on or about 21 November 2018, subject to the satisfaction of various customary closing conditions.
The statement said the proceeds would be deployed to  fund  fiscal deficit and other financing needs. The latest offer  represents Nigeria’s   sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.

The Nigerian delegation to London was led by Minister of finance, Mrs. Zainab  Shamsuna Ahmed. Other members of the delegation are, Minister of Budget and National Planning, Senator Udoma Udo Udoma, Central Bank Governor, Godwin Emefiele, Director General of the Debt Management Office (DMO), Patience Oniha, and Director General of the Budget Office of the Federation, Ben Akabueze.

The Joint Lead Managers for the issuance were Citibank Global Markets Limited and Standard Chartered Bank and the financial advisors were FSDH Merchant Bank Limited.

Speaking on the outcome of the pricing, Minister of finance , Zainab Ahmed said the proceeds would be deployed to critical sectors of the economy.

“Nigeria is investing strategically in critical capital projects to bridge our infrastructure deficit, provide a better operating environment for the private sector, and improve the standard of living of our citizens.
“The proceeds of this issuance will provide critical financing for projects in transportation, power, agriculture, housing, healthcare and education as well as the capital elements of our social investment programmes. Nigeria’s Economic Recovery and Growth plan is delivering results”, the Minister said.

Commenting on the Notes’ pricing, the DMO Director General, Patience Oniha said:

“Nigeria’s continued ability to access the international markets to raise capital is a testament to investor’s confidence which has been supported by continuous engagement with them on various reform initiatives and outcomes.
“The issuance of the Eurobonds, which received the prior approval of the Executive and Legislative arms of government, will not only provide capital to finance various projects, but also contribute towards the achievement of the Debt Management Strategy. The ability to raise US$2.86 billion, which is the exact amount government needed in volatile and challenging market conditions has been described as a stellar outcome ”

When issued, the Notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.

Nigeria may apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.

Leave a Reply