FG lists $1bn Eurobond on NSE
The Debt Management Office (DMO) of the Federal Government of Nigeria has on Thursday 2nd March 2017 listed the $1 billion FGN Euro bond issued under Nigeria’s newly established Global Medium Term Note programme on the Nigerian Stock Exchange (“NSE” or “The Exchange”).
The 15-year domestic Sovereign Eurobond priced at par and at a coupon of 7.875 per cent per year, ranked as the first foreign currency denominated security to be listed and traded in the Nigerian capital market.
Director General, Debt Management Office (DMO), Dr. Abraham Nwankwo said earlier on his visit to the Exchange that “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”.
Nwankwo noted that the Eurobond which was over-subscribed by 780%, 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 over subscription rate underscores a buoyant investor’s appetite for building exposure to Nigeria and demonstrates international confidence in the economy’s long term prospects”.
Executive Director, Market Operations and Technology, 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.
Mr. Bajomo further remarked that “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”, added Bajomo.
The listing brings to five the number of listings that have occurred on the Exchange in 2017. The Exchange admitted Forte Oil’s Bond, Exchange Traded Fund (ETF) and Real Estate Investment Trust (REITs) whilst welcoming Medview Airline and Jaiz Bank to its Main Board via Listing by Introduction.