Government announces pricing of $1bn notes under its Global Medium Term Note programme
Nigeria yesterday announced that it has priced its offering of $1 billion aggregate principal amount of notes under its newly established $1 billion Global Medium Term Note programme. The Notes will bear interest at a rate of 7.875 per cent and will mature on February 16, 2032 with a bullet repayment of the principal.
The Federal Government intends to use the proceeds of the notes to fund capital expenditures in the 2016 budget. The Notes represent the Republic’s third Eurobond issuance, following issuances in 2011 and 2013.
The Notes were approximately eight times oversubscribed with orders in excess of US$7.8 billion compared to a pre-issuance target of US$ 1.0 billion demonstrating strong market appetite for Nigeria. This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.
The offering attracted significant interest from leading global institutional investors. The Notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market. The Republic will apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.
The pricing was determined following a roadshow led by Mrs. Kemi Adeosun, the Honorable Minister of Finance, Senator Udoma Udo Udoma, the Honorable Minister of Budget and National Planning, Godwin Emefiele, Governor of the Central Bank of Nigeria, Dr. Abraham Nwankwo, the Director-General of the Debt Management Office (DMO) and Mr Ben Akabueze, the Director General of the Budget Office, to key global financial centres.
Commenting following the successful pricing, Minister of Finance Adeosun said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure. At the heart of the agenda is a commitment to invest in developing Nigeria’s infrastructure through a target 30 per cent annual budget commitment to capital expenditure. We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”
This communication is not an offer of securities for sale in the United States. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act, and the rules and regulations thereunder. The Republic does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States or elsewhere.
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