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Uche Usim, Abuja
To further reduce the cost of government borrowing, while maintaining Nigeria’s net debt levels, the Ministry of Finance yesterday announced that it has priced its offering of $2.5 billion aggregate principal amount of dual series notes (the Notes) under its Global Medium Term Note Programme.
According to a statement by the Minister of Finance, Mrs. Kemi Adeosun, the notes comprise a $1.25 billion 12-year series and a $1.25 billion 20-year series.
He said 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. The country intends to use the proceeds of the Notes for the refinancing of domestic debt. The Notes, she added, 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 $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 Exchange’s regulated market. The country may apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange (NSE).
“The pricing was determined following a series of short meetings and conference calls with investors,” she said.
She added: “Nigeria 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.”
Also commenting on the Notes’ pricing, the DMO Director General, Patience Oniha, said: “With the successful pricing of our 5th eurobond, Nigeria’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 per cent and a 20-year bond at a yield of 7.696 per cent, both of which are consistent in price with our existing portfolio.”
