FG’s $1bn Global Medium Term Notes over subscribed

The Federal Government on Thursday announced that its $1 billion Global Medium Term Note programme was eight 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.

According to a press statement signed by Salisu Na’inna Dambatta, Director (Information), “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 Notes will bear interest at a rate of 7.875 per cent and will mature on 16th February 2032 with a bullet repayment of the principal.

The statement explained that the Federal Government intends to use the proceeds of the Notes to fund capital expenditures in the 2016 budget. The Notes represent the country’s third Eurobond issuance, following issuances in 2011 and 2013.

The 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.

The pricing was determined following a road show 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 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.”

Commenting on the Notes’ pricing, the DMO Director General, Dr Abraham Nwankwo said: “Nigeria is delighted to have successfully priced its third Eurobond issue. 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.”