Nigeria floats $3bn dual-tranche bond

Finance minister kemi Adeosun

The Federal Government, yesterday, floated $3 billion Euro bond to raise funds from foreign capital in line with the 2017 Budget financing plan.
The Minister of Finance, Kemi Adeosun, in a statement said it would be in dual series notes under its US$4.5 billion Global Medium Term Note programme.

The Notes comprised a US$1.5 billion 10-year series and a US$1.5 billion 30-year series.

It explained that the 10-year series will bear interest at a rate of 6.5%, while the 30-year series will bear interest at a rate of 7.625%, which will 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 28 November, 2017, subject to the satisfaction of various customary closing conditions.

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.

The Finance Minister disclosed that the Government would utilise the proceeds of the Notes in funding the approved budgetary expenditures and for refinancing of domestic debt, as may be applicable.

According to her, the Notes represent the Nigeria’s fourth Eurobond issuance, following issuance in 2011, 2013 (two series) and earlier in 2017.

According to her, “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 (GDP) 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.

”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.