Nigeria Raises US$2.86bn Eurobonds With Orders In Excess of $9.5bn - DMO

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Friday, November 16, 2018 / 11:08 AM / by DMO

 

Nigeria Raises A Total Of Us$2.86 Billion Across 7 Year, 12 Year And 30 Year Eurobonds, With Orders In Excess Of $9.5 Billion

 

Proceeds to fund the fiscal deficit and other financing needs

 

The Federal Republic of Nigeria (the “Republic”) today announces that it has priced its offering of US$2.86 billion aggregate principal amount of triple series notes (the “Notes”) under its Global Medium-Term Note Programme. The offering has attracted significant interest from leading global institutional investors with a peak combined order book of over US$9.5 billion, which reflects an over-subscription of more than 3 times and demonstrates the on-going confidence of international capital market investors in Nigeria’s investment story. 

Despite significant oil and wider macro market volatility, Nigeria has successfully raised its external debt requirements for the 2018 budget at a cost considerably lower than many of its peers across Sub-Sahara Africa. The successful transaction follows closely behind Nigeria’s successful engagement with the Fitch rating agency, and their subsequent decision to change the outlook on Nigeria’s sovereign rating from B+ (negative) to B+ (stable), based on improving macro-economic fundamentals. 

The Notes comprise a US$1.18 billion 7-year series, US$1.00 billion 12-year series and a US$750 million 30-year series. The 7-year series will bear interest at a rate of 7.625%, while the 12-year series will bear interest at a rate of 8.75%, and the 30-year series will bear interest at a rate of 9.25%. In each case, they will be repayable with a bullet repayment of the principal on maturity. 

The offering is expected to close on or about 21 November 2018, subject to the satisfaction of various customary closing conditions. The Republic intends to use the proceeds of the Notes towards funding of the fiscal deficit and other financing needs. The Notes represent the Republic’s sixth Eurobond issuance, following issuances in 2011, 2013, two in 2017 and one in early 2018 and its first triple-tranche offering.

When issued, 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 may 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 series of meetings with investors in London and conference calls with investors globally attended by the Nigerian delegation, which comprised Honourable Minister of Finance, Zainab Shamsuna Ahmed, the Honourable Minister of Budget and National Planning, Senator Udoma Udo Udoma, Central Bank Governor, Godwin Emefiele, Director General of the Debt Management Office (DMO), Patience Oniha, and Director General of the Budget Office of the Federation, Ben Akabueze. The Joint Lead Managers for the issuance were Citibank Global Markets Limited and Standard Chartered Bank and the financial advisors were FSDH Merchant Bank Limited. 

Commenting following the successful pricing, the Honourable Minister of Finance, Mrs Zainab Ahmed said: 

“Nigeria is investing strategically in critical capital projects to bridge our infrastructure deficit, provide a better operating environment for the private sector, and improve the standard of living of our citizens. The proceeds of this issuance will provide critical financing for projects in transportation, power, agriculture, housing, healthcare and education as well as the capital elements of our social investment programmes. Nigeria’s Economic Recovery and Growth plan is delivering results.” 

Commenting on the Notes’ pricing, the DMO Director General, Patience Oniha said: 

"Nigeria’s continued ability to access the international markets to raise capital is a testament to investor’s confidence which has been supported by continuous engagement with them on various reform initiatives and outcomes. The issuance of the Eurobonds, which received the prior approval of the Executive and Legislative arms of government, will not only provide capital to finance various projects, but also contribute towards the achievement of the Debt Management Strategy. The ability to raise US$2.86 billion, which is the exact amount government needed in volatile and challenging market conditions has been described as a stellar outcome”


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