Nigeria makes history as its $1bn Eurobond starts trading at Stock Exchange

Nigeria makes history as its $1bn Eurobond starts trading at Stock Exchange
The Federal Government has listed its $1 billion Eurobond at the Nigerian Stock Exchange (NSE), making history as the first foreign currency denominated security to be listed and traded in the Nigerian capital market.

The government on Thursday listed the $1 billion Eurobond on the NSE. The Eurobond has a tenor of 15 years and will be due for redemption in 2032. It carries a coupon rate or interest rate of 7.875 per cent.
Commenting on the listing, the Director General, Debt Management Office (DMO), Dr Abraham Nwankwo said 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 said.
He noted that the Eurobond which was over-subscribed by 780 per cent, 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 oversubscription rate underscores a buoyant investor’s appetite for building exposure to Nigeria and demonstrates international confidence in the economy’s long term prospects,” Nwankwo said.
Also speaking on the listing, Executive Director, Market Operations and Technology, Nigerian Stock Exchange (NSE), 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.
Bajomo noted 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.
According to him, the historic listing 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,” Bajomo said.

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