Nigeria’s $500 million debut Eurobond
was yesterday admitted to trading at the London Stock Exchange’s (LSE)
Main Market. The bond, which was 2.5 times subscribed, netting $1.25
billion, offers an annual interest rate of 6.75 per cent, and matures
in January 2021.
A statement by the LSE said the
offering creates a benchmark US Dollar bond yield curve that should
lead to lower borrowing rates for Nigerian companies issuing corporate
bonds in the domestic and international markets.
“Cheaper and easy to access debt finance is fundamental to the growth prospects of Nigerian companies,” the statement added.
Ibukun Adebayo, head of Business
Development – Africa, at London Stock Exchange Group, said the choice
of London as the market to issue its first sovereign debt is the
beginning of the next phase in the development of the Nigerian
corporate bond market.
“The fact that London was selected for
such a significant transaction reflects the city’s status as the
world’s most international financial centre, with the knowledge and
expertise to successfully price a brand new sovereign bond,” Mr.
Adebayo said.
Investors from 18 countries spanning
Europe, the United States, Asia, and Africa took up the offer, which
opened and closed on January 21, finance minister, Olusegun Aganga,
said.
“Investors are impressed by Nigeria’s
credit story and were very keen to participate in the offering. More
remarkable is the exceptional quality and diversity of investors from
18 countries spanning Europe, the US, Asia and Africa,” Mr. Aganga
said, after the close of the book.
He added that Nigerian corporate scene
can now more easily access well-priced long term financing from the
international capital markets to fund economic opportunities such as
infrastructural development.
“We now have a transparent and internationally observable benchmark
against which international investors can accurately price risk. My
expectation is for an increase in capital inflows and FDI (foreign
direct investment) into the economy,” he added.
