The Federal
Republic of Nigeria has priced its offering of US$1 billion aggregate principal
amount of notes under its newly established US$1 billion Global Medium Term
Note programme, reports ITRealms.
The Notes, ITRealms gathered will bear interest at
a rate of 7.875 per cent to mature on 16th February 2032 with a
bullet repayment of the principal.
The pricing,
ITRealms also gathered, was
determined during 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.
According to
the Director of Information at the Federal Ministry of Finance, Mr. Salisu Na'inna Dambatta, in press
statement available to ITRealms, the
Federal Government 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,” he said.
The Notes,
he explained 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,
he said, attracted significant interest from leading global institutional
investors, stressing that the Notes will be admitted to the official list of
the United Kingdom (UK) Listing Authority and available to trade on the London
Stock Exchange’s regulated market.
In addition,
ITRealms reports that 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.
Mrs Kemi
Adeosun was quoted as saying that 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,” she said.
For the DMO
Director General, Dr Abraham Nwankwo, “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.”
As said by
Dambatta, this does not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of the securities referred to herein
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration, exemption from registration or qualification under the
securities laws of any such jurisdiction.
“The FG has
not registered, and does not intend to register, any portion of the securities
in any of these jurisdictions,” he insisted.
Even as he
pointed out, the approval of the Nigerian Securities and Exchange Commission is
not required for primary offerings of securities issued by the Republic.
“Any
securities referred to herein have not been registered with the Nigerian
Securities and Exchange Commission. Where securities issued by the Republic are
listed on any securities exchange in Nigeria, the securities shall be subject
to the relevant regulatory requirements relating to secondary market transactions
of securities issued by the Republic. In
such circumstances, offering participants will be required to comply with
applicable rules and regulations in Nigeria in order to offer the relevant securities
to the public in Nigeria,” he emphasized.
Ayo Midele/GEE
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