In a landmark move, the federal government of Nigeria has raised over $900 million through its inaugural Domestic US Dollar Bond, marking a notable milestone in the country’s financial development. The bond issuance, which saw about 180% oversubscription, demonstrates strong investor confidence in the country’s economic prospects. Despite persistent challenges, the achievement is celebrated as proof of the administration’s determination to expand its financial sources and enhance economic development. This Security is included in the Domestic FGN US Dollar Bond Initiative, created by Presidential Executive Order No. 16 of 2023. It features a 9.75% Interest Rate for five years and is issued at par value, appealing to many investors.
The debt security received broad interest from Nigerians and the diaspora, non-Nigerians residing in the country, and qualified institutional investors. The passionate reaction highlights the advancing complexity of the country’s Capital Market and the rising confidence in its financial future. Regarding the debt issuance’s achievement, Nigeria’s Finance Minister and Coordinating Minister of the Economy, Wale Edun, applauded the milestone. He emphasised that the oversubscription showcases strong confidence in the stability and growth capabilities of the national economy. As President Bola Ahmed Tinubu outlined, the proceeds will be channelled into vital economic sectors, underscoring the government’s commitment to supporting the country’s development.
Nigeria’s bond strengthens its global market standing and economic plan.
However, the country enhances its standing in international capital markets by introducing this bond to the Nigerian Exchange Limited and the FMDQ Securities Exchange Limited. This move allows the nation to access more advanced financial tools and represents a crucial advancement in promoting financial inclusion for its citizens. Wale Edun emphasised that the bond’s achievement showcases the government’s initiative to broaden its funding sources. This diversification is vital amid today’s economic environment as the country navigates complex challenges while pursuing sustainable development.
Edun further underscored the significance of this debt security in supporting the government’s comprehensive economic strategy. By bringing in domestic and international investors, the financial instrument illustrates that confidence in Nigeria’s future remains strong despite global uncertainties. Also, Patience Oniha, the Director-General of the Debt Management Office (DMO), expressed similar views. She praised the dedication and collaboration that brought this issuance to reality and emphasised that the achievement of this transaction is attributed to the thorough planning and knowledge contributed by the financial advisers and consultants engaged in the process.
Multiple organisations collaborated to ensure the initiative’s success.
Furthermore, the Africa Finance Corporation received notable acknowledgement as the Global Coordinator, while United Capital Plc was recognised for its efforts as the Lead Issuing House and Coordinator. Key collaborators in the endeavour included Meristem Capital Limited, Stanbic IBTC Capital Limited, and Vetiva Advisory Services Limited, who were instrumental in ensuring the successful launch of the debt security. Legal firms Olaniwun Ajayi LP and G. Elias played a crucial role in offering legal guidance, ensuring that every step complied with relevant laws and regulations.
At the same time, financial consultants like Constant Capital Markets and Securities Limited, together with Iron Global Markets Limited, helped manage the complexities and details of this innovative deal. The partnership between these parties highlights the nation’s capacity to participate in financial markets, enhancing its appeal as a place for investment. Oniha pointed out that the results from this debt issuance, which secured more than $900 million compared to the initial target of $500 million, demonstrate the increasing experience of the local fixed-income market. The wide range of Investors participating in the debt security enhances the foundation for future issuances.
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By surpassing the original goal by 180%, the nation has demonstrated a solid message to the global market regarding its economic resilience and potential for growth domestically. Looking back on the success of this debt issuance, the DMO reiterated its dedication to collaborating with investors and stakeholders to ensure ongoing economic advancement in the country. The office is committed to pursuing creative strategies to address the nation’s funding requirements, ensuring that resources are allocated to essential areas supporting long-term development.