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Second green bond offer records 220% oversubscription, says DMO

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Ms Patience Oniha, Director-General, Debt Management Office, Nigeria

• ‘It’s a demonstration of confidence’
The Debt Management Office (DMO), yesterday, said its second Sovereign Green Bond offering, where it sought to raise about N15 billion to support the Federal Government’s climate change project resulted in oversubscription of over 220 per cent.

According to the DMO Director-General, Ms. Patience Oniha, the Offer, which opened to the general public on June 3, and closed on June 10, was preceded by road show meetings with investors and other stakeholders in Lagos, and Abuja.

“The results of the second Sovereign Green Bond issuance revealed increased knowledge and awareness of Green Bonds by subscribers, and perhaps also demonstrated a greater level of commitment from the general public towards protecting the environment,” she was quoted in a statement.

She revealed that the total value of subscriptions received was N32.93 billion, representing 220% of the N15 billion offered. Similarly, the number of subscribers doubled when compared to the figure for the first Sovereign Green Bond issued in December 2017.

She further revealed that Retail investors were not left out, as the number of individuals who subscribed for the second Sovereign Green Bond more than doubled.

The amount of subscriptions grew by almost 201% with the share of total subscriptions rising to 1.43% compared to 0.67% for the 2017 Sovereign Green Bond. The stronger participation of retail investors shows that financial inclusion and deepening of the domestic financial market, which are some of the key objectives of the DMO in its issuance activities, are being achieved.

Meanwhile, in a reaction, the Chairman of the Abuja Chapter of the Chattered Institute of Bankers of Nigeria (CIBN), Prof. Uche Uwaleke, yesterday said investors’ increasing and surging appetite for Nigeria’s debt instruments was an expression of confidence based on the stability achieved in the polity and macroeconomics dynamics recorded by the current administration in the last four years.

Uwaleke also said: “Another reason is the security of the investment and the high rate of return. As you may be aware, the return on the FGN Bonds far outstretch other classes of assets, that’s the reason they continue to attract investors, particularly by the banks in the country. This is to the extent that the Central Bank of Nigeria has observed that banks instead of directing credit to the real sector prefer to invest in the FGN Bonds because of the high rate of return.

“I completely support the move by the CBN to limit this incursion by the banks, and force them to perform their legitimate function in the society for value creation to spur growth.”

Oniha explained that the DMO allotted only the N15 billion that was offered for a tenor of seven years, at a coupon of 14.50% annually.

“The proceeds of the Green Bond will be used to finance projects in the 2018 Appropriation Act, which will contribute to Nigeria’s commitments to the Paris Agreement on Climate Change. The projects include Off-Grid Solar and Wind Farm, Irrigation, Afforestation and Reforestation, as well as, Ecological Restoration,” further revealed the plan.

She said the DMO was assisted in the landmark offering by the following financial advisors: Chapel Hill Denham Advisory Limited; Capital Assets Limited; Rand Merchant Bank Nigeria Limited and Stanbic IBTC Capital Limited.


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