Another $900 million bond money for Nigeria
Africa Finance Corporation (AFC) (www.AfricaFC.org), recognized as the foremost provider of infrastructure solutions on the continent, has today announced the successful issuance of its inaugural domestic dollar bond on behalf of the Federal Government of Nigeria (FGN). This issuance has raised US$900 million, representing a significant advancement in the nation’s economic progress.
AFC served as the Global Coordinator for this unprecedented issuance within Nigeria’s capital market. The bond, issued at par, features a five-year tenor and an annual coupon rate of 9.75%. The offering concluded with an impressive 180% oversubscription, highlighting robust domestic investor confidence in Nigeria’s economic stability and growth prospects, as well as the effectiveness of AFC’s strategic leadership in capital markets.
As a domestic issuance, the investor base included both Nigerian and non-Nigerian residents, Nigerians living abroad, and institutional investors. The bond will be listed for trading on the Nigerian Exchange Limited (“NGX”) and the FMDQ Securities Exchange Limited (“FMDQ Exchange”).
This successful issuance underscores AFC’s crucial role in aiding the Nigerian government’s efforts to enhance domestic capital markets, foster financial inclusion, and diversify funding avenues. It represents the inaugural issuance under the FGN’s Domestic US Dollar Bond Programme. The proceeds from this bond will be allocated to vital sectors of the Nigerian economy, as approved by the President based on the recommendations of the Minister of Finance, pending appropriation by the National Assembly.
Banji Fehintola, Executive Director and Head of Financial Services at Africa Finance Corporation, stated, “The launch of this inaugural domestic US dollar bond issuance represents a remarkable milestone for Nigeria and signifies a new phase in the evolution of the nation’s capital markets. We take pride in our pivotal role as the Global Coordinator in this historic transaction, which is in line with AFC’s commitment to advancing domestic capital markets across Africa by offering innovative financing solutions tailored to the continent’s specific requirements. Our extensive expertise in capital markets enables us to provide exceptional value to our clients. This successful issuance not only highlights Nigeria’s economic capabilities but also emphasizes the advantages for African countries to explore their domestic capital resources and take initiative in funding their own development.”
AFC has demonstrated a robust history in capital markets, supported by a well-established and diverse investor engagement strategy, which included the issuance of a US$1.16 billion global syndicated loan earlier this year. The Corporation recently received accolades, including “The Most Innovative Bond” award at the EMEA Finance Achievement Awards for its groundbreaking JPY 75 billion Samurai Bond Guarantee for the Arab Republic of Egypt, as well as the “Best Supranational Syndicated Loan” award for securing a US$625 million syndicated loan last year, attracting new lenders from the Middle East and Asia.
In addition to AFC’s role as Global Coordinator for the domestic bond issuance, United Capital Plc served as the Lead Issuing House/Coordinator, while Meristem Capital Limited, Stanbic IBTC Capital Limited, and Vetiva Advisory Services Limited acted as Issuing Houses. Constant Capital Markets & Securities Limited and Iron Global Markets Limited functioned as Financial Advisers, with Olaniwun Ajayi LP and G. Elias serving as Solicitors, and Greenwich Trustees Limited fulfilling the role of Trustee.
