The Federal Republic of Nigeria today announces that it has priced its offering of US$1 billion aggregate principal amount of notes under its newly established US$1 billion Global Medium Term Note programme.
The Notes will bear interest at a rate of 7.875% and will mature on 16th February 2032 with a bullet repayment of the principal.
The Republic intends to use the proceeds of the Notes to fund capital expenditures in the 2016 budget. The Notes represent the Republic’s third Eurobond issuance, following issuances in 2011 and 2013.
The Notes were approximately 8 times oversubscribed with orders in excess of US$7.8 billion compared to a pre-issuance target of US$ 1.0 billion demonstrating strong market appetite for Nigeria.
This is despite continued volatility in emerging and frontier markets and shows confidence by the international investment community in Nigeria’s economic reform agenda.
The offering attracted significant interest from leading global institutional investors. 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 will 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 roadshow led by Mrs. Kemi Adeosun, the Honorable Minister of Finance, Senator Udoma Udo Udoma, the Honorable Minister of Budget and National Planning, Godwin Emefiele, Governor of the Central Bank of Nigeria, Dr. Abraham Nwankwo, the Director-General of the Debt Management Office (DMO) and Mr Ben Akabueze, the Director General of the Budget Office, to key global financial centres.
Commenting following the successful pricing, the Honorable Minister of Finance Mrs Kemi Adeosun said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure. At the heart of the agenda is a commitment to invest in developing Nigeria’s infrastructure through a target 30% annual budget commitment to capital expenditure. We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”
On his part commenting on the Notes’ pricing, the DMO Director General, Dr Abraham Nwankwo said: “Nigeria is delighted to have successfully priced its third Eurobond issue. We have successfully extended the tenor of our borrowing programme in the international capital markets to 15 years, at a price that reflects belief in the quality of Nigeria’s cash flows and government. The Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.”
Terms of the Bonds
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.