DMO lists first FG $1b foreign currency bond on NSE

The Debt Management Office on Thursday listed the Federal Government $1 billion eurobond at 7.875 per cent due 2032 on the Nigerian Stock Exchange platform.
Dr. Abraham Nwankwo, the DMO Director-General, made this known during the bond listing at the NSE in Lagos.
Nwankwo said the Eurobond was raised under reasonable terms for funding of capital expenditure stated in the budget.
He said the projects included rails, bridges and power, adding that the bond was the first ever foreign currency bond to be listed on the exchange.
According to him, the listing of the bond is the DMO commitment to democratise what it does for Nigerians to have access, choice and inclusiveness to the bond trading.
He said that the listing of domestic Sovereign Eurobond reinforces Federal Government’s commitment to deepen and grow the Nigerian capital market.
Nwankwo explained that developing the domestic market would bridge the infrastructure deficit constraining economic growth.
He noted that the Eurobond which was over-subscribed by 780 per cent was part of government funding strategy for its 2016 capital expenditure and it would be spent on key infrastructure projects in line with its economic plan.
Nwankwo said: “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.”
Also, Monday Usiade of DMO said that minimum denominations for the international Eurobond issuance were $200,000 at multiples of $1,000.
Usiade said the coupon rate for the bond was 7.875 per cent per annum payable on semi-annual basis.
He explained that the primary listing was London Stock Exchange, while NSE and FMDQ OTC Securities Exchange were the secondary listing.
Usiade said investor’s distribution of the bond indicated that asset managers stood at 73 per cent, hedge fund 13 per cent, insurance/pension 10 per cent, banks/private banks three per cent and others one per cent.
Accordingly, Ade Bajomo, the Executive Director, Market Operations and Technology, commended DMO for listing the Eurobond in the nation’s purse.
He noted that the domestic listing would 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.”
He said that it would set the foundation for raising and listing more foreign denominated securities in Nigeria which would open up additional capital raising options for issuers and portfolio diversification opportunities to investors”.
He said: “The Exchange, working with Central Securities Clearing System 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.
“This is to ensure seamless trading and settlement of the Eurobond.”