Nigeria’s $2.5bn Eurobond attracts over 7.143% rates
Abuja – The Federal government has announced the offering of US$2.5 billion aggregate principal amount of dual series notes under its Global Medium Term Note Programme.
The Notes comprise of a US$1.25 billion 12-year series and a US$1.25 billion 20-year series.
The 12-year series will bear interest at a rate of 7.143%, while the 20-year series will bear interest at a rate of 7.696%, and, in each case, will be repayable
with a bullet repayment of the principal on maturity.
The Minister of Finance, Mrs Leno Adeosun disclosed in America, last night.
She said that the offering is expected to close on or about 23 February 2018, subject to the satisfaction of various customary closing conditions.
The government intends to use the proceeds of the Notes for the refinancing of domestic debt.
The Notes represent the Republic’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.
The offering has attracted significant interest from leading global institutional investors with a peak order book of over US$11.5 billion.
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 Republic 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 pricing was determined following a series of short meetings and conference calls with investors.
Commenting following the successful pricing, Mrs. Adeosun said: “Nigeria is focused on reducing the cost of our debt portfolio and ensuring we have the optimal mix
between domestic and international debt. The proceeds of the issuance, which would supplement the issuances we completed in 2017, will be used to re-finance domestic debt, which is high cost and short term, with lower-cost international debt, with a longer tenure. We will have a range of Eurobonds in issue, encompassing 5 year, 10 year, 12 year, 15 year, 20 year and 30 year bonds, giving investors a full basket of options to participate in. ”
Commenting on the Notes’ pricing, the DMO Director General, Patience Oniha said:
“With the successful pricing of our 5th Eurobond, Nigeria’s status as an Issuer of Eurobonds with a strong and diverse investor base has been further consolidated. This time Nigeria has priced a new 12-year bond at a yield of 7.143% and a 20-year bond at a yield of 7.696%, both of which are consistent in price with our existing portfolio.
I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio, with external debt at considerably lower cost, but also that the impact of the process has already led to a reduction in the cost of
domestic borrowing, and so a double benefit for the cost of our broader debt portfolio. Lower domestic rates will also benefit corporate organisations.”
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