Nigeria’s $1b Eurobond oversubscribed
Nigeria’s finance minister, Kemi Adeosun said that Nigeria’s $1b eurobond offered in the international market has been oversubscribed at an interest rate of 7.875%. She said the Notes 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.
According to her, this demonstrated 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 bond will mature on 16th February 2032 with a bullet repayment of the principal. Adeosun and Central Bank Governor, Mr. Godwin Emefiele, Budget Minister, Senator Udoma Udo Udoma as well as other top officials of the Debt Management Office went on a roadshow from last week through this week, which took them to global financial institutions in Europe, Southern Africa and the United States to promote the bond.
The full statement by Adeosun’s ministry: “Announcement of pricing of Nigeria’s US$1b eurobond notes by the Federal Republic of Nigeria under its Nigeria’s $1b eurobond Global Medium Term Note programme
The Federal Republic of Nigeria (the “Republic”) today announces that it has priced its offering of US$1 billion aggregate principal amount of notes (the “Notes”) under its newly established US$1 billion Global Medium Term Note programme. The Notes will bear interest at a rate of 7.875% and will mature on 16th February 2032 with a bullet repayment of the principal. The Republic 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.
The Notes 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 attracted significant interest from leading global institutional investors. 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 will 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 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.
Commenting following the successful pricing, the Honorable Minister of Finance Mrs Kemi Adeosun said: “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.”