Economy

$2.86b Eurobond: Nigeria Receives $9.5b Subscriptions from Investors

Published

6 years ago

15/11/2018

By Modupe Gbadeyanka

The Debt Management Office (DMO) on Wednesday disclosed that the $2.86 billion worth of Eurobond issued by the Nigerian government was successful.

In a statement yesterday, the debt office said subscriptions worth $9.5 billion were received from investors, reflecting their confidence in the Nigerian economy.

The Eurobond was offered by Nigeria under on Global Medium-Term Note Programme.

Despite significant oil and wider macro market volatility, Nigeria has successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa.

The successful transaction follows closely behind Nigeria’s successful engagement with the Fitch rating agency, and their subsequent decision to change the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals.

According to the DMO, the notes offered to the international investors comprise a $1.18 billion 7-year series, $1.00 billion 12-year series and a $750 million 30-year series.

It was disclosed that the 7-year series will bear interest at a rate of 7.625 percent, while the 12-year series will bear interest at a rate of 8.75 percent, and the 30-year series will bear interest at a rate of 9.25 percent. In each case, they will be repayable with a bullet repayment of the principal on maturity.

The DMO said the offering is expected to close on or about November 21, 2018, subject to the satisfaction of various customary closing conditions.

Nigeria intends to use the proceeds of the papers towards funding of the fiscal deficit and other financing needs.

The bonds represent Nigeria’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.

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.

The DMO said 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.

According to the debt office, the pricing was determined following a series of meetings with investors in London and conference calls with investors globally attended by the Nigerian delegation, which comprised Minister of Finance, Mrs Zainab Ahmed; Minister of Budget and National Planning, Mr Udoma Udo Udoma; Central Bank Governor, Mr Godwin Emefiele; Director General of DMO, Mrs Patience Oniha; and Director General of the Budget Office of the Federation, Mr Ben Akabueze.

Commenting, the Minister of Finance said, “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.

“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.”

Also speaking on the bond issuance, the DMO boss 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 $2.86 billion, which is the exact amount government needed in volatile and challenging market conditions has been described as a stellar outcome.”

Economy

NASD Index Appreciates 0.69% to 3,095.00 Points

Published

4 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.

During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.

In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.

Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.

Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.

During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.

At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.

Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.

Economy

FX Supply Pressure Weakens Naira to N1,548/$1 at NAFEM

Published

4 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira recorded a 0.38 per cent or N5.86 depreciation on the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 13 to close at N1,548.89/$1, in contrast to the preceding session’s N1,543.03/$1.

The local currency weakened further in the official market yesterday as the deadline to cut off Bureaux De Change (BDC) operators from the Electronic Foreign Exchange Matching System (EFEMS) built to enhance transparency in the FX system looms.

Recall that the Central Bank of Nigeria (CBN) in December opened a 42-day window to allow BDCs to buy FX worth $25,000 per week from the spot market.

However, the domestic currency appreciated against the Pound Sterling in the official market on Monday by N11.87 to trade at N1,877.43/£1 compared with last Friday’s N1,889.29/£1 and against the Euro, it improved its value by N4.94 to close at N1,578.87/€1, in contrast to the previous trading day’s N1,583.81/€1.

A look at the parallel market indicated that the Nigerian Naira slumped against the greenback yesterday by N5 to sell at N1,655/$1 compared with the preceding session’s N1,650/$1.

In the cryptocurrency market, large positive outcomes came even as risk assets weighed the possibility of US Federal Reserve rate cuts in the wake of Friday’s hotter-than-expected US jobs report.

The biggest gainer was recorded by Dogecoin (DOGE) as it rose by 3.9 per cent to sell at $0.3422, Bitcoin (BTC) grew by 0.9 per cent to trade at $94,843.98, Binance Coin (BNB) appreciated by 0.8 per cent to sell for $687.84, and Solana (SOL) recorded a 0.8 per cent growth to quote at $185.24.

Further, Ripple (XRP) increased its value by 0.7 per cent to close at $2.53, and Cardano jumped by 0.3 per cent to settle at $0.9469.

On the flip side, Ethereum (ETH) depreciated by 1.9 per cent to finish at $3,159.52, and Litecoin (LTC) went down by 0.9 per cent to close at $98.68, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Prices up as China, India Seek Alternative Supply After Fresh US Sanctions

Published

5 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

Oil prices rose on Monday as Chinese and Indian buyers sought new suppliers after the administration of President Joe Biden of the United States imposed toughest sanctions yet on Russian energy.

Last Friday, the US Treasury Department imposed sanctions on Gazprom Neft and Surgutneftegas, as well as 183 vessels that traded oil as part of Russia’s so-called “shadow fleet” of tankers. The move is expected to cost Russia billions of Dollars per month.

This pushed the price of Brent higher by $1.25 or 1.6 per cent yesterday to $81.01 per barrel and raised the US West Texas Intermediate (WTI) crude by $2.25 or 2.9 per cent to $78.82 a barrel.

As a result, Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to the severe sanctions on Russian producers and tankers that are designed to curb the revenues of the world’s second-largest oil exporter.

The large sanction gives Ukraine and the US President-elect, Mr Donald Trump, leverage to reach a deal for peace in the almost three years war.

Market analysts note that these sanctions have the potential to take as much as 700,000 barrels per day of supply off the market, which would erase the surplus that we are expecting for this year.

On its part, Goldman Sachs estimated that vessels targeted by the new sanctions transported 1.7 million barrels per day of oil in 2024, or 25 per cent of Russia’s exports. The bank is increasingly expecting its projection for a Brent range of $70-$85 to trade.

The Vladimir Putin-led government said the sanctions risked destabilising global markets, and Russia would seek to counter them.

Many of the tankers named have been used to ship oil to India and China after previous Western sanctions. A price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.

Also, six European Union countries called on the European Commission to lower the price cap put on Russian oil by G7 countries, arguing it would reduce Russia’s revenue to continue the war while not causing a market shock.

However, weaker demand from major oil buyers, China, could have an impact on the tighter supply as data showed that China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic.