Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, has announced the issuance of an inaugural domestic dollar bond from the Federal Government of Nigeria (FGN), raising US$900 million and marking a significant milestone in the country’s economic development.
The corporation acted as Global Coordinator on the first-of-its-kind issuance for Nigeria’s capital market and it marked the first issuance under the FGN’s Domestic US Dollar Bond Programme.
The bond, which was issued at par and had a tenor of five years and carries an annual coupon of 9.75%, closed with a 180% over-subscription, underscoring strong domestic investor confidence in Nigeria’s economic stability and growth potential.
As a domestic issue, the investor base comprised Nigerians and non-Nigerians resident in Nigeria, Nigerians in the Diaspora, and institutional investors and the bond will be listed and available for trading on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited (“FMDQ Exchange”).
A news report on the bond issuance from African Press Organisation (APO) Group circulated on behalf of the AFC, indicated that the successful issuance demonstrated AFC’s pivotal role in supporting the Nigerian government’s commitment to deepening domestic capital markets, promoting financial inclusion and diversifying funding sources.
According to the government, proceeds of the bond issue will be invested in critical sectors of the Nigerian economy approved by the President on the recommendation of the Minister of Finance, subject to appropriation by the National Assembly.
Commenting on the successful performance of the bond in the investment market, AFC’s Executive Director and Head of Financial Services, Banji Fehintola, enthused: “This inaugural domestic US dollar bond issuance is a significant achievement for Nigeria and marks a new chapter in the development of the country’s capital markets.
“We are honoured to have played a leading role in this landmark transaction as the Global Coordinator, which aligns with AFC’s mission to develop domestic capital markets in Africa by providing innovative financing solutions that meet the continent’s unique needs and also leveraging our deep capital market expertise to serve and deliver value to our clients.
“This successful issuance not only showcases Nigeria’s economic potential but also reinforces the benefits of African nations looking inward to tap the deep pool of domestic capital on the continent and taking the lead in financing their own development”, the finance expert added.
While the AFC served as Global Coordinator for the domestic bond issuance, United Capital Plc acted as Lead Issuing House/Coordinator; Meristem Capital Limited, Stanbic IBTC Capital Limited and Vetiva Advisory Services Limited acted as Issuing Houses; Constant Capital Markets & Securities Limited and Iron Global Markets Limited acted as Financial Advisers; Olaniwun Ajayi LP and G. Elias acted as Solicitors; and Greenwich Trustees Limited acted as Trustee.
