In a groundbreaking move, Nigeria has successfully issued its first-ever Domestic Federal Government of Nigeria (FGN) US Dollar Bond, raising over $900 million from investors. This landmark transaction marks a significant milestone in Nigeria’s efforts to deepen its capital market and diversify funding sources.
The bond, which was oversubscribed by 180%, has a five-year tenor and a semi-annual coupon rate of 9.75%. The proceeds from the bond will be used to fund critical sectors of the economy, subject to legislative approval, as part of ongoing efforts to sustain growth and address key infrastructure gaps.
The issuance of the bond is a testament to growing investor confidence in Nigeria’s economic outlook, despite global economic headwinds. The bond’s broad-based appeal is evident in the diverse range of investors who participated, including Nigerian residents, non-residents, Nigerians in the diaspora, and qualified institutional investors.
The bond will be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited, increasing its accessibility and tradability within the domestic financial ecosystem.
According to Wale Edun, Minister of Finance and Coordinating Minister of the Economy, the success of the bond issuance signals robust investor sentiments towards Nigeria’s economic trajectory. He reaffirmed the administration’s focus on economic reforms, describing the bond as a testament to the Federal Government’s resolve to explore innovative funding solutions while promoting financial inclusion.
The bond issuance aligns with President Bola Ahmed Tinubu’s broader economic agenda of improving fiscal stability, strengthening foreign reserves, and creating a conducive environment for local and foreign investments.
Patience Oniha, Director-General of the Debt Management Office (DMO), emphasized the strategic importance of the bond, crediting the transaction’s success to the expertise of the advisory team. She commended all parties involved in the issuance, including the legal partners and financial advisers.
Oniha noted that the issuance demonstrates Nigeria’s ongoing commitment to leveraging its capital markets for economic growth. She expressed satisfaction with the remarkable outcome of the bond, citing the diverse investors who subscribed to the bond as evidence of the depth and increasing sophistication of the domestic fixed-income securities market.
The success of the bond issuance signals optimism for further capital market developments. With the right policy mix and investor confidence, Nigeria could unlock more innovative financing solutions, boosting its fiscal space and solidifying its place as a key player in the African capital markets landscape.
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