Investors Prepare for Nigeria’s $500m Bond Sale August 19

By Adedapo Adesanya

Investors are already anticipating the issue of a Dollar-denominated bond worth $500 million by the federal government of Nigeria on Monday, August 19.

Proceeds from the exercise, targeted at local and foreign investors, would be used to fund the country’s budget deficit and boost the weakening Naira.

This development is a change from an earlier plan to issue a Eurobond this year, indicating that it will be opting for the cheaper Dollar bond instead.

This Dollar bond is the first of its kind in the country, with the bond offering bullet repayment at maturity in US Dollars and full repayment of the principal amount at the end of the five-year term.

Speaking on Thursday at a hybrid roadshow with investors organised by the Debt Management Office (DMO), the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, stressed that the bond is a strategic move to channel funds into sectors that will catalyse economic growth in the country.

He affirmed that the country alongside its financial advisors is ready to launch the bond.

“In the financial market, you never know. When you wake up and you see an event that helps the issue, you will take advantage of it. But we can assume that we are imminently about to launch.

“We are eagerly looking forward to not just the funds but the experience of Nigerians taking leadership in this all-important area. We must also mention that it is another arrow in the quiver,” he stated.

Giving more details of the bond, the Managing Director of Investment Banking at United Capital Group, Mr Gbadebo Adenrele, disclosed that, “The auction will open next week on Monday. Next week Monday, we will have that open, and the details of that will be communicated to the market.”

“One of the key aspects of this bond issuance is that it will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors.

“The principal will be repaid after five years, with interest payments made every six months. This structured repayment schedule is designed to provide confidence to investors,” he further explained.

On her part, the Director General of the Debt Management Office (DMO), Ms Patience Oniha, noted that the settlement date for the domestic Dollar bond auction will likely be in 10 days after the auction date.