By Dipo Olowookere
Director General of the Debt Management Office (DMO), Dr Abraham Nwankwo, has disclosed that the first diaspora bond issued by the Federal Government was oversubscribed by 130 percent, yielding $300 million from the exercise.
Dr Nwankwo, in a statement on Monday, stated that Nigeria raised the $300 million at the international capital market at 5.625 percent for a tenor of five years.
According to him, the exercise was mainly for Nigerians living outside the country and it is to give them the opportunity to contribute their quota to national development.
He noted that this has “opened a new source of financing for the Federal Government to raise funds for critical projects in the country.”
Dr Nwankwo added that, “This new window further enhances funding liquidity and flexibility of the Nigerian economy, which are necessary characteristics as the country gathers momentum towards the attainment of advanced economy status.”
Nigeria is the first African country to issue a bond targeted at retail investors in the United States, a market highly regulated by the United States Securities and Exchange Commission (US SEC).
The only previous US SEC registration for an African country was targeted at institutional investors.
The issuance of a bond registered by the US SEC provides an opportunity to access a wide range of investors.
Explaining the structure of the bond, the DMO boss said it is like a retail instrument to appeal to a wide range of investors, offered through private banks and wealth managers rather than institutional investors, which normally deal in large volume transactions.
He revealed that there was considerable interest from investors from all over the world, with the issue attracting initial orders of about 190 percent of the offered amount.
Final subscriptions were about 130 percent of offer at the final price for the transaction.
