The Nigerian Stock Exchange (NSE) will today list the $1 billion Federal Government (FGN) Eurobond issued under Nigeria’s newly established Global Medium Term Note programme.
This 15-year domestic sovereign Eurobond priced at par and at a coupon of 7.875 per cent per annum is the first foreign currency denominated security to be listed and traded in the Nigerian capital market.
Commenting on the listing, the Director General, Debt Management Office (DMO), Dr. Abraham Nwankwo said: “The listing of domestic sovereign Eurobond reinforces FGN’s commitment to deepen and grow the Nigerian capital market. Developing the domestic market can help bridge the infrastructure deficit constraining economic growth.”
According to him, the Eurobond which was over-subscribed by 780 per cent, is part of FGN’s funding strategy for its 2016 capital expenditure and will be spent on key infrastructure projects, in line with its economic plan.
“This huge oversubscription rate underscores a buoyant investor’s appetite for building exposure to Nigeria and demonstrates international confidence in the economy’s long term prospects,” Nwankwo said.
Speaking in the same vein, the Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo commended the DMO for listing the Eurobond in the nation’s bourse. He noted that the domestic listing will diversify its investors’ base by giving Nigerian institutional investors access to the bond.
Bajomo said:“The listing of the dollar denominated bond on the exchange will boost price discovery and liquidity in the local market as well as help attract reliable long term foreign currency denominated funds into the financial market. It will also set the foundation for raising and listing more foreign denominated securities in Nigeria which will open up additional capital raising options for issuers and portfolio diversification opportunities to investors.”
“To ensure seamless trading and settlement of the Eurobond, the Exchange, working with Central Securities Clearing System (CSCS) developed and presented to issuers and transaction parties, a framework depicting onshore and cross border trade and settlement process in line with robust market practices,” he added.
Meanwhile, the equities market declined further yesterday as the NSE All Share Index (NSE ASI) depreciated by 0.58 per cent to close at 25,183.10. The depreciation recorded in the share prices of Zenith Bank, Nigerian Breweries, Forte Oil, Guinness and FBN Holdings were mainly responsible for the loss recorded in the Index. The decline brought the year-to-date (YTD) depreciation in the NSE ASI to 6.29 per cent as at yesterday.