DMO lists series II FGN ₦15 billion green bond on NSE

The Nigerian Stock Exchange (NSE), on Monday, announced the listing of e Federal Government of Nigerian (FGN) N15billion green bond on its daily official list.

Promoted by the Debt Management Office (DMO), the 7-year Green bond issued at coupon rate of 14.50% on June 13, 2019, is due to mature on June 13, 2026.

This Series II Green Bond issued to finance renewable energy, afforestation, and transportation projects, follows the debut Sovereign ₦10.69billion Green Bond that was issued in December 2017, and listed on the NSE in July 2018.

Commenting on the listing, Jude Chiemeka, Head, Trading Business Division, NSE, said: “We are pleased to admit the Series II FGN Green Bond to our Green and Sustainable Bond Market. Our collaboration with the Ministry of Environment (MOE), and the DMO on deepening the Green Bond market, which dates back to 2016, reinforces the Exchange’s commitment to position Nigeria as a financial centre for green and sustainable financing.

“The recent partnership with the Luxembourg Stock Exchange (LuxSE), further demonstrates NSE’s passion to provide enabling environment for issuers and investors in the Nigerian capital market.
“The Exchange will continue to work with key stakeholders in transitioning to a low-carbon and sustainable economy as well as develop innovative products and services in close collaboration with the market.”

Chiemeka also congratulated the Minister of Environment and the Management of the DMO on the successful issuance of a second Green Bond; a laudable feat in addressing environmental challenges and fostering sustainable financing in Nigeria.

Nigeria’s participation in the Green bond market is in line with the Federal Government’s commitment to achieving its Nationally Determined Contributions (NDC) under the Paris Agreement on Climate Change signed in September 2016.

The DMO had also in July 2019, listed the second ₦100 billion, 7-Year, FGN Sukuk due to mature in 2025 on the NSE platform.

The Sukuk was raised at a rental rate of 15.743 per cent, a 73-basis point discount from the 16.47 per cent rental rate of the maiden issuance listed in April 2018.

Sukuk bonds are structured to generate returns to ethical investors without infringing on the Islamic principles, which forbid interest payments. It represents an ownership interest in the asset to be financed rather than in a debt obligation.

According to DMO, the FGN Sukuk aims to promote financial inclusion and deepen of the investor base for FGN securities as well financing infrastructure, in keeping with Government’s commitment to bridging the infrastructural gap across the country.