The Nigerian Stock Exchange (NSE), will on Thursday, March 2, 2017, list the $1 billion Federal Government 15-year domestic Sovereign Eurobond issued under Nigeria’s newly established Global Medium Term Note programme.
The instrument priced at par and at a coupon of 7.875% per annum is the first foreign currency denominated security to be listed and traded in the Nigerian capital market, which according to Director General, Debt Management Office (DMO), Dr Abraham Nwankwo “reinforces FGN’s commitment to deepen and grow the Nigerian capital market. Developing the domestic market can help bridge the infrastructure deficit constraining economic growth”.
The Eurobond that was over-subscribed by 780%, he continued, is part of government’s funding strategy for its 2016 capital expenditure and will be spent on key infrastructure projects, in line with its economic plan.
“This huge oversubscription rate underscores a buoyant investor’s appetite for building exposure to Nigeria and demonstrates international confidence in the economy’s long term prospects”.
Commending the DMO for listing the Eurobond on the domestic stock market, Executive Director, Market Operations and Technology of the NSE, Ade Bajomo noted that it would diversify the NSE’s investors’ base by giving Nigerian institutional investors access to the bond.
Furthermore, he explained: “the listing of the dollar denominated bond on the Exchange will boost price discovery and liquidity in the local market as well as help attract reliable long term foreign currency denominated funds into the financial market. It will also set the foundation for raising and listing more foreign denominated securities in Nigeria which will open up additional capital raising options for issuers and portfolio diversification opportunities to investors.
“To ensure seamless trading and settlement of the Eurobond, the Exchange, working with Central Securities Clearing System (CSCS) developed and presented to issuers and transaction parties, a framework depicting onshore and cross border trade and settlement process in line with robust market practices”, added Bajomo.
According to the NSE statement, this brings to five the number of listing that has occurred on the Exchange in 2017 namely: Forte Oil’s Bond, Exchange Traded Fund (ETF) and Real Estate Investment Trust (REITs) whilst welcoming Medview Airline and Jaiz Bank to its Main Board via Listing by Introduction.