Ndubuisi Francis in Abuja
The federal government has announced the offering of US$2.5 billion Eurobond aggregate principal amount of dual series notes (the â€œNotesâ€) under its Global Medium Term Note Programme.
The Notes comprise a US$1.25 billion 12-year series and a US$1.25 billion 20-year series.
The 12-year series will bear interest at a rate of 7.143 per cent, while the 20-year series will bear interest at a rate of 7.696 per cent and, in each case, will be repayable with a bullet repayment of the principal on maturity.
The offering is expected to close on or about February 23, 2018, subject to the satisfaction of various customary closing conditions.
Nigeria intends to use the proceeds of the Notes for the refinancing of domestic debt. They represent the country’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.
The offering has attracted significant interest from leading global institutional investors with a peak order book of over US$11.5 billion.
When issued, the Notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchangeâ€™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 short meetings and conference calls with investors.
Commenting following the successful pricing, the Minister of Finance, Mrs Kemi Adeosun, said: â€œNigeria is focused on reducing the cost of our debt portfolio and ensuring we have the optimal mix between domestic and international debt. The proceeds of the issuance, which would supplement the issuances we completed in 2017, will be used to re-finance domestic debt, which is high cost and short term, with lower-cost international debt, with a longer tenor. We will have a range of Eurobonds in issue, encompassing five-year, 10-year, 12 year, 15 year, 20-year and 30-year bonds, giving investors a full basket of options to participate in.â€
Commenting on the Notesâ€™ pricing, the DMO Director General, Patience Oniha said: “With the successful pricing of our 5th Eurobond, Nigeriaâ€™s status as an Issuer of Eurobonds with a strong and diverse investor base has been further consolidated. This time Nigeria has priced a new 12-year bond at a yield of 7.143% and a 20-year bond at a yield of 7.696%, both of which are consistent in price with our existing portfolio. I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio, with external debt at considerably lower cost, but also that the impact of the process has already led to a reduction in the cost of domestic borrowing, and so a double benefit for the cost of our broader debt portfolio. Lower domestic rates will also benefit corporate borrowers.â€