FG Issues $2.5bn Eurobond

The Federal Government has announced that it has priced its offering of US$2.5 billion Eurobond aggregate principal amount of dual series notes under its Global Medium Term Note Programme.
The Notes comprise a US$1.25 billion 12-year series and a US$1.25 billion 20-year series.

The 12-year series will bear interest at a rate of 7.143%, while the 20-year series will bear interest at a rate of 7.696%, and, in each case, will be repayable with a bullet repayment of the principal on maturity.

A statement from the finance ministry said the successful issuance would help further reduce the cost of government borrowing, while maintaining Nigeria’s net debt levels

The offering is expected to close on or about 23 February 2018, subject to the satisfaction of various customary closing conditions.
Nigeria intends to use the proceeds of the Notes for the refinancing of domestic debt. The Notes represent the Republic’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.

The offering has attracted significant interest from leading global institutional investors with a peak order book of over US$11.5 billion. When issued, the Notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.
The Republic may apply for the Notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange.
The pricing was determined following a series of short meetings and conference calls with investors.
Commenting following the successful pricing, the Minister of Finance Mrs Kemi Adeosun said:
“Nigeria is focused on reducing the cost of our debt portfolio and ensuring we have the optimal mix between domestic and international debt. The proceeds of the issuance, which would supplement the issuances we completed in 2017, will be used to re-finance domestic debt, which is high cost and short term, with lower-cost international debt, with a longer tenure. We will have a range of Eurobonds in issue, encompassing 5 year, 10 year, 12 year, 15 year, 20 year and 30 year bonds, giving investors a full basket of options to participate in. ”
Commenting on the Notes’ pricing, the DMO Director General, Patience Oniha said:
“With the successful pricing of our 5th Eurobond, Nigeria’s status as an Issuer of Eurobonds with a strong and diverse investor base has been further consolidated. This time Nigeria has priced a new 12-year bond at a yield of 7.143% and a 20-year bond at a yield of 7.696%, both of which are consistent in price with our existing portfolio. I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio, with external debt at considerably lower cost, but also that the impact of the process has already led to a reduction in the cost of domestic borrowing, and so a double benefit for the cost of our broader debt portfolio. Lower domestic rates will also benefit corporate borrowers.”

The information contained in this communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. The Republic has not registered, and does not intend to register, any portion of the securities in any of these jurisdictions.
This communication is not an offer of securities for sale in the United States. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act, and the rules and regulations thereunder. The Republic does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States or elsewhere.
This communication does not constitute an offer of the Securities to the public in the United Kingdom. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom or (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order, and (iv) any other persons to whom it may otherwise lawfully be communicated or caused to be communicated (all such persons in (i) to (iv) together being referred to as “Relevant Persons”). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.
The approval of the Nigerian Securities and Exchange Commission is not required for primary offerings of securities issued by the Republic. Any securities referred to herein have not been registered with the Nigerian Securities and Exchange Commission. Where securities issued by the Republic are listed on any securities exchange in Nigeria, the securities shall be subject to the relevant regulatory requirements relating to secondary market transactions of securities issued by the Republic. In such circumstances, offering participants will be required to comply with applicable rules and regulations in Nigeria in order to offer the relevant securities to the public in Nigeria.