The Federal Government on Thursday announced that it has priced its offering of US$500 million aggregate principal amount of notes at a yield of 7.5% under its US$1.5 billion (increased from US$1 billion) Global Medium Term Note Programme, which will be consolidated and form a single series with the Republic’s existing US$1,000,000,000 7.875 per cent.
According to the Federal Government, the terms and conditions of the Notes will be identical to those of the Original Notes, paying a coupon of 7.875% per annum, maturing on 16 February 2032 and repayable by way of bullet repayment of the principal together with the Original Notes.
As with the Original Notes, the Federal Government intends to use the proceeds of the Notes to fund capital expenditures in the 2016 budget.
The successful pricing, which is priced 37.5bps inside the original coupon rate, demonstrates continued strong market appetite for Nigerian securities. This, despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.
When issued, the Notes will be admitted alongside the Original Notes to the official list of the UK Listing Authority and to trading on the London Stock Exchange’s regulated market.
The Government may apply for the Notes to be eligible for trading or listed on the Nigerian Stock Exchange and Financial Markets Dealers Quotations Over-the-Counter Securities Exchange.
Pricing of the Notes comes shortly after Nigeria launched its National Economic Recovery and Growth Plan 2017-2020 on 7 March 2017.
The plan focuses on policy objectives in five core areas; macroeconomic policy, economic diversification and growth drivers, competitiveness, social inclusion and jobs, and governance and other enablers.
Key targets of the NERGP include reaching single-digit inflation, further growth in the agricultural sector, reducing unemployment, increasing operational energy capacity and domestic refining capacity, improving transportation infrastructure and stabilising the exchange rate, with an emphasis on implementation, monitoring and evaluation of these economic goals.
The Minister of Finance, Mrs Kemi Adeosun said:“The proceeds from this additional note issuance will go towards funding capital projects in the 2016 budget. Infrastructure spending is at the heart of our National Economic Recovery and Growth Plan, which was released earlier this month and guides how we will deliver the urgent reform our economy needs between now and 2020. Resetting the Nigerian economy is essential in order for us to deliver sustainable long term growth.”
