In Unprecedented Feat, Nigeria Raises over $900m in Domestic FGN US Dollar Bond

Kayode Tokede

In an unprecedented move aimed at strengthening the economy and advancing financial inclusion, the Federal Government has raised over $900million from its first-ever Domestic Federal Government of Nigeria (FGN) US Dollar Bond issuance. The Debt Management Office (DMO) described the achievement as a pivotal 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 saw an impressive over 180% subscription, highlighting the continued confidence of investors in Nigeria’s economic stability and growth prospects. Priced at par and carrying a 9.75% coupon over five years, the bond is the first under the Domestic FGN US Dollar Bond Programme, established pursuant to Presidential Executive Order No. 16 of 2023.

The landmark bond issuance attracted a diverse range 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, positioning Nigeria as a key player in deepening its capital markets and promoting financial inclusion.

According to Edun, proceeds from the bond will be directed towards critical 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 funding and bolstering economic growth despite current economic challenges.

Edun expressed confidence in Nigeria’s economic trajectory, describing the bond issuance as extremely successful “The issuance of this inaugural Domestic FGN US Dollar Bond demonstrates that investors, as well as Nigerians, continue to have faith in the country’s economy” the minister said.

Director General of the DMO, Ms. Patience Oniha, also expressed gratitude to all the parties involved in the transaction. She praised 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 Houses. Our legal partners, Olaniwun Ajayi LP and G. Elias, and financial advisers, Constant Capital Markets and Securities Limited and Iron Global Markets Limited, for their critical roles in structuring and executing the bond.

“This transaction was made possible through the expertise and guidance of our advisers. 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 DMO was very pleased with the remarkable outcome of the exercise. She added in particular that over $900 million, which represented an over 180% subscription when compared to the $500 million that was offered, as well as the diverse investors who subscribed to the Bond, attested to the depth and increasing sophistication of the domestic fixed income securities market.

The DMO reaffirmed the Federal Government’s commitment to collaborating with investors and stakeholders to drive economic growth and development in the country.