Investors Oversubscribe Nigeria’s $500m Domestic Dollar Bond by 80%

By Aduragbemi Omiyale

The maiden $500 million domestic dollar bond issuance of Nigeria recorded a subscription rate of 180 per cent, Business Post reports.

This newspaper gathered that the country raised about $900 million from the exercise, reflecting strong local investor confidence in Nigeria’s economic stability and growth potential.

The continent’s leading infrastructure solutions provider, Africa Finance Corporation (AFC), was the global coordinator for the bond sales, issued at par on a five-year maturity and an annual coupon of 9.75 per cent.

Proceeds of the bond issue will be invested in critical sectors of the Nigerian economy approved by President Bola Tinubu on the recommendation of the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, though subject to appropriation by the National Assembly.

It was learned that the dollar-denominated paper attracted a wide range of investors, including Nigerians and non-Nigerians who reside in Nigeria, Nigerians in the Diaspora, and institutional investors.

The bond will be listed and available for trading on the Nigerian Exchange (NGX) Limited and the FMDQ Securities Exchange Limited.

Commenting on the exercise, the Executive Director and Head of Financial Services at AFC, Mr Banji Fehintola, said, “This inaugural domestic US dollar bond issuance is a significant achievement for Nigeria and marks a new chapter in the development of the country’s capital markets.”

“We are honoured to have played a leading role in this landmark transaction as the Global Coordinator, which aligns with AFC’s mission to develop domestic capital markets in Africa by providing innovative financing solutions that meet the continent’s unique needs and also leveraging our deep capital market expertise to serve and deliver value to our clients.

“This successful issuance not only showcases Nigeria’s economic potential but also reinforces the benefits of African nations looking inward to tap the deep pool of domestic capital on the continent and taking the lead in financing their development,” he added.