Saturday, February 11, 2017

Nigeria successfully priced own third Eurobond @ $1bn

The Federal Republic of Nigeria has priced its offering of US$1 billion aggregate principal amount of notes under its newly established US$1 billion Global Medium Term Note programme, reports ITRealms.

The Notes, ITRealms gathered will bear interest at a rate of 7.875 per cent to mature on 16th February 2032 with a bullet repayment of the principal.

The pricing, ITRealms also gathered, was determined during a roadshow led by Mrs. Kemi Adeosun, the Honorable Minister of Finance, Senator Udoma Udo Udoma, the Honorable Minister of Budget and National Planning, Godwin Emefiele, Governor of the Central Bank of Nigeria, Dr. Abraham Nwankwo, the Director-General of the Debt Management Office (DMO) and Mr Ben Akabueze, the Director General of the Budget Office, to key global financial centres.

According to the Director of Information at the Federal Ministry of Finance, Mr. Salisu Na'inna Dambatta, in press statement available to ITRealms, the Federal Government intends to use the proceeds of the Notes to fund capital expenditures in the 2016 budget.

“The Notes represent the Republic’s third Eurobond issuance, following issuances in 2011 and 2013,” he said.

The Notes, he explained were approximately 8 times oversubscribed with orders in excess of US$7.8 billion compared to a pre-issuance target of US$ 1.0 billion demonstrating strong market appetite for Nigeria. This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.

The offering, he said, attracted significant interest from leading global institutional investors, stressing that the Notes will be admitted to the official list of the United Kingdom (UK) Listing Authority and available to trade on the London Stock Exchange’s regulated market.

In addition, ITRealms reports that FG will apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.

Mrs Kemi Adeosun was quoted as saying that Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.

“At the heart of the agenda is a commitment to invest in developing Nigeria’s infrastructure through a target 30% annual budget commitment to capital expenditure. We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately,” she said.

For the DMO Director General, Dr Abraham Nwankwo, “We have successfully extended the tenor of our borrowing programme in the international capital markets to 15 years, at a price that reflects belief in the quality of Nigeria's cash flows and government. The Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.”

As said by Dambatta, this does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

“The FG has not registered, and does not intend to register, any portion of the securities in any of these jurisdictions,” he insisted.

Even as he pointed out, the approval of the Nigerian Securities and Exchange Commission is not required for primary offerings of securities issued by the Republic.

“Any securities referred to herein have not been registered with the Nigerian Securities and Exchange Commission. Where securities issued by the Republic are listed on any securities exchange in Nigeria, the securities shall be subject to the relevant regulatory requirements relating to secondary market transactions of securities issued by the Republic.  In such circumstances, offering participants will be required to comply with applicable rules and regulations in Nigeria in order to offer the relevant securities to the public in Nigeria,” he emphasized.

Ayo Midele/GEE 
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