Nigeria’s First Domestic Dollar Bond Oversubscribed 180%, Raises $900 Million

In an unprecedented move to strengthen the economy and promote financial inclusion, the federal government has raised over $900 million from the first-ever issuance of the Federal Government of Nigeria (FGN) US dollar bond. The Debt Management Office (DMO) described the achievement as a key step in Nigeria’s economic development.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, in a statement said the bond issuance garnered an impressive subscription rate of over 180%, underscoring investors’ continued confidence in Nigeria’s economic stability and growth prospects. The bond, priced at par and with a coupon of 9.75% for a five-year term, is the first bond under the country’s FGN US Dollar Bond Program, established pursuant to Presidential Executive Order No. 16 of 2023.

The groundbreaking bond issuance has attracted a diverse group of investors, including Nigerians and non-Nigerians residing in the country, Nigerians in the diaspora, as well as qualified institutional investors. It will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited, cementing Nigeria’s position as a key player in deepening capital markets and promoting financial inclusion.

According to Edun, the proceeds from the bonds will be channelled into key sectors of the economy as approved by President Bola Ahmed Tinubu. The minister noted that the successful issuance underscores the government’s commitment to diversifying its sources of financing and supporting economic growth despite the current economic challenges.

Edun expressed confidence in the Nigerian economic trajectory, describing the bond issuance as a huge success. “The issuance of these first domestic FGN US Dollar Bonds shows that investors, as well as Nigerians, still believe in the country’s economy,” the minister said.

DMO CEO, Ms. Patience Oniha, also expressed gratitude to all parties involved in the transaction. She commended all parties including Africa Finance Corporation as Global Coordinator, United Capital Plc as Lead Issuing House/Coordinator, Meristem Capital Limited, Stanbic IBTC Capital Limited and Vetiva Advisory Services Limited as Issuing House. Our legal partners, Olaniwun Ajayi LP and G. Elias, and financial advisors, Constant Capital Markets and Securities Limited and Iron Global Markets Limited, for their key roles in structuring and implementing the bonds.

“This transaction was made possible thanks to the expertise and guidance of our advisors. We also appreciate the continued support of the Nigerian public and our institutional partners who contributed to the successful completion of this historic issuance,” Oniha said.

Speaking further, she said that the DMO was very pleased with the remarkable outcome of the exercise. She added in particular that the over $900 million, which was over 180% subscription compared to the $500 million that was offered, and the diverse investors who subscribed for the bonds were evidence of the depth and growing sophistication of the domestic fixed income securities market.

The DMO reaffirmed the Federal Government’s commitment to working with investors and stakeholders to stimulate the country’s economic growth and development.

Kayode Tokede