Nigeria is set to launch its first-ever dollar-denominated domestic bond next Monday, aiming to raise $500 million from both local and international investors. This groundbreaking move is expected to attract a wide range of investors and boost the country’s financial markets.
The announcement was made by Dr. Gbadebo Adenrele, Managing Director of Investment Banking at United Capital Group, during a hybrid roadshow organized by the Debt Management Office (DMO) on Thursday. He confirmed that the auction for the bond will commence next week, with details to be communicated to the market soon.
“This bond issuance marks a significant milestone, as it will be listed on the Nigerian Exchange and the Financial Market Dealers Quotation (FMDQ), making it accessible to a diverse investor base,” Adenrele stated. The bond, which has a five-year term, will feature bullet repayment in U.S. dollars at maturity, with interest payments made every six months.
Nigeria’s Minister of Finance, Wale Edun, also expressed optimism about the bond issuance, emphasizing its strategic importance in driving economic growth. “We are eagerly anticipating not just the funds, but also the leadership role Nigerians will play in this critical area,” Edun said, highlighting the government’s readiness to launch the bond.
Patience Oniha, Director-General of the DMO, noted that the settlement date for the bond auction would likely be ten days after the auction date, providing a clear timeline for investors.
The Federal Government’s circular revealed plans to potentially double the initial $500 million target, with a maximum subscription goal of $1 billion. The total bond program is set at $2 billion, with the possibility of increasing it based on demand.
Investors can participate in the bond with a minimum subscription of $10,000, and additional investments can be made in multiples of $1,000. The bond proceeds will be invested in key sectors approved by the President, with oversight from the National Assembly.
Moreover, the bond is designed to be tax-efficient, with interest payments exempt from income tax. It will be listed on both the Nigerian Exchange Limited (NGX) and the FMDQ, ensuring liquidity and broad accessibility for investors.
This innovative financial instrument represents a significant step forward for Nigeria’s capital markets and offers a new avenue for investment in the nation’s economic future.
