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FG’s $2.86bn Eurobonds over-subscribed by $9.5bn

…Proceeds to fund fiscal deficit, other financing needs
The Federal Government on Wednesday announced 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.

A statement by the Special Adviser to the Minister of Finance, (Media & Communications), Paul Ella Abechi, said 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 the Minister of Finance, Zainab Shamsuna Ahmed, 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, 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”.

The information contained in this communication shall 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 Republic has not registered, and does not intend to register, any portion of the securities in any of these jurisdictions.

This communication is not an offer of securities for sale in the United States.

The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act, and the rules and regulations thereunder.

The Republic does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States or elsewhere.

This communication does not constitute an offer of the Securities to the public in the United Kingdom.

This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom or (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services

and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth entities, and other persons to whom it may lawfully be communicated,

falling within Article 49(2)(a) to (d) of the Order, and (iv) any other persons to whom it may otherwise lawfully be communicated or caused to be communicated (all such persons in (i) to (iv) together being referred to as “Relevant Persons”).

Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons.

Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

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.

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