The proceeds from the bond issuance will be strategically allocated to crucial sectors of the Nigerian economy, as approved by the President based on the recommendations provided by the Minister of Finance.
Africa Finance Corporation (AFC), recognized as the premier provider of infrastructure solutions on the continent, has announced the successful issuance of its inaugural domestic dollar bond on behalf of the Federal Government of Nigeria (FGN). This issuance has raised US$900 million, representing a significant advancement in the nation’s economic progress.
AFC served as the Global Coordinator for this unprecedented issuance in Nigeria’s capital market. The bond, issued at par, features a five-year tenor and an annual coupon rate of 9.75%. The offering was met with remarkable enthusiasm, closing with a 180% oversubscription, which highlights the robust confidence of domestic investors in Nigeria’s economic resilience and growth prospects, as well as the effectiveness of AFC’s leadership in capital markets.
The bond attracted a diverse investor base, including Nigerians and non-Nigerians residing in Nigeria, members of the Nigerian Diaspora, and institutional investors. It will be listed for trading on both the Nigerian Exchange Limited (“NGX”) and the FMDQ Securities Exchange Limited (“FMDQ Exchange”).
This successful issuance underscores AFC’s crucial role in aiding the Nigerian government’s efforts to enhance domestic capital markets, foster financial inclusion, and diversify funding avenues. It is the inaugural issuance under the FGN’s Domestic US Dollar Bond Programme. The funds raised will be allocated to vital sectors of the Nigerian economy, as approved by the President based on recommendations from the Minister of Finance, pending appropriation by the National Assembly.
"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," said Banji Fehintola, Executive Director and Head of Financial Services, Africa Finance Corporation. "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."
AFC has a solid track record in capital markets with a well-established diverse investor engagement program that included issuance of a US$1.16 Billion global syndicated loan earlier this year. The Corporation was recently bestowed with "The Most Innovative Bond" award at the EMEA Finance Achievement Awards for its pioneering JPY 75 billion Samurai Bond Guarantee to the Arab Republic of Egypt and the “Best Supranational Syndicated Loan” award for securing a US$625 million syndicated loan last year, welcoming new lenders from the Middle East and Asia.
Alongside AFC’s role 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.