Nigeria announces pricing of $500 million notes at 7.5% yield
By Florence Israel, Abuja.
The Nigerian government through the Federal Ministry of Finance on Wednesday has announced the pricing of its US$500 million aggregate principal amount of notes to be at a yield of 7.5 percent under its US$1.5 billion Global Medium Term Note programme.
In a statement sent to The DEFENDER from the Finance Ministry, the US$500 million notes will be consolidated to form series with the country’s existing US$1, 000, 000, 000 with terms and conditions that are identical to that of the original notes paying 7.875 percent per annum and due to mature in the year 2032, whereas the proceeds of the original notes are expected to fund capital expenditures in the 2016 budget.
The successful pricing of these notes priced at 37.5 bps at the original coupon rate means that there is still strong appetite for Nigerian securities. It also demonstrates confidence in Nigeria’s economic reform agenda by the international investment community.
The pricing of the notes followed after the launching of Nigeria’s National Economic and Growth Recovery Plan (NEGRP) 2017 – 2020 on the 7th of March 2017.
The plan has the aim of teaching single digit inflation, growth in agricultural sector, unemployment reduction, increase in operational energy and domestic refining capacity, Improvement of transportation infrastructure and attaining stability in exchange rate.
While speaking concerning the successful pricing, the Minister of Finance, Mrs. Kemi Adeosun said: “The proceeds from this additional notes 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.”
Also commenting on the notes’ pricing, the DMO Director General, Dr Abraham Nwankwo said: “Following the success of our US$1 billion note issuance in February, Nigeria is delighted to have increased our 2017 Eurobond programme to US$1.5 billion and to have secured the additional US$500 million. Nigeria was keen to take advantage of favorable market conditions and investor appetite for Nigerian debt to complete our foreign borrowing programme for the 2016 budget and deliver further funds for vital capital projects.”
