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Tag: Bond

  • Investors invited as Nigeria unveils $500 Million bond, subscription open until August 

    Investors invited as Nigeria unveils $500 Million bond, subscription open until August 

    The Federal Government of Nigeria has officially launched a $500 million dollar-denominated bond, available for subscription starting August 19, 2024.

    This follows the government’s earlier announcement of its intention to issue the bond as part of its financing initiatives. The bond carries an interest rate of 9.75 percent per annum and is set to mature in 2029.

    The subscription period for the bond will remain open until August 30, 2024, providing ample opportunity for investors to participate.

    The settlement date, when investors’ purchases will be confirmed and interest will begin to accrue, is scheduled for September 6, 2024.

    This bond represents a significant component of Nigeria’s financial strategy, offering investment opportunities to both domestic and international investors. Structured as a five-year investment, the bond will make coupon payments semi-annually.

    Investors can buy units starting at $1,000 each, with an initial minimum subscription of $10,000 (equivalent to 10 units). Subsequent investments can be made in multiples of $1,000. The bond will be redeemed through a bullet repayment at the end of the five-year term, ensuring that investors receive their principal in full upon maturity.

    This bond issuance is part of the government’s broader efforts to stimulate the Nigerian economy, as outlined by the Minister of Finance, Wale Edun. Patience Oniha, the Director General of the Debt Management Office (DMO), also noted that the settlement for this bond will occur 10 days after the auction date.

  • Adeleke approves N1.6bn bond certificates for 346 retirees

    Adeleke approves N1.6bn bond certificates for 346 retirees

    Gov. Ademola Adeleke of Osun has approved the release of bond certificates worth N1.6 billion for 346 retirees under the contributory pension scheme.

    This is contained in a statement issued by the Permanent Secretary, Local Government Staff Pension Bureau, Mr Ibrahim Akibu, on Wednesday in Osogbo.

    Adeleke said the beneficiaries cut across primary schools teachers and local governments staff, among other retirees.

    He said about 182 primary school teachers and 164 local government staff were among the beneficiaries of the bond certificates.

    Adeleke said the presentation ceremony would take place on Dec. 21.

    ”This is another phase in fulfilment of my open resolve to clear backlogs of salaries, pensions and emoluments issues within the public service.

    “We have commenced payment of inherited half salaries and other emoluments owed public licence servants by the past administration,” Adeleke said.

    According to him, the presentation of the bond certificates is a continuation of the commitment of the state government to workers welfare in and out of service.

  • DMO to auction 3 new FGN bonds valued at N225bn in April

    DMO to auction 3 new FGN bonds valued at N225bn in April

    The Debt Management Office (DMO) has offered three new Federal Government of Nigeria (FGN) bonds valued at N225 billion for subscription through auction in April.

    They are an N75 billion FGN bond at a 13.5 per cent interest rate, due in March 2025 (10-year re-opening) and an N75 billion FGN bond, due in April 2032 (10-year new issue).

    The third one is an N75 billion bond at a 13 per cent interest rate, due in January 2042 (a 20-year re-opening).

    The bonds are valued at N1,000 with a minimum subscription of N50 million, and in multiples of 1000 units thereafter.

    The auction date is April 25, while successful bidders have April 27 deadline to pay up.

    “For re-opening of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest.

    “The bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

    “They also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption, pension fund amongst other investors.

    “They are listed on The Nigerian Stock Exchange Ltd. and FMDQ OTC Securities Exchange,’’ the DMO stated.

    It added that all FGN bonds qualify as liquid assets for liquidity ratio calculation for banks.

    “FGN bonds are backed by the full faith and credit of the FGN and are charged upon the general assets of Nigeria,’’ it added.

  • Ecobank Nigeria Announces $300m Bond Pricing

    Ecobank Nigeria Announces $300m Bond Pricing

    Ecobank Nigeria announced that it has successfully priced its $300 million bond issuance maturing in February 2026, with settlement of the debt instrument to take place on February 16, 2021.

    According to a statement from the bank, the fixed-rate, US dollar-denominated bond, with a tenor of 5 years, carries a coupon rate of 7.125% and will be listed on the London Stock Exchange.

    It is accompanied by an Issuer Rating of B- from Fitch Rating Agency and S & P.

    It explained that the coupon/yield represents the lowest ever coupon/yield achieved by a Nigerian financial institution for a benchmark bond transaction.

    “At the peak of marketing the transaction, the issue was over three times over-subscribed, with significant interest from international investors.

    “The transaction opened with Initial Price Thoughts of 7.75% and finally tightened to close at 7.125% on the back of robust demand. The strength and depth of the book demonstrated global investors’ strong appetite for the Ecobank franchise in Nigeria, a testament to the strength of the Ecobank Group,” it stated.

    It stated that the transaction was the first non-sovereign bond from Africa in 2021, describing it as a milestone capital raise for the banking sector in Nigeria, “giving Ecobank access to global debt capital markets, and more favorable credit terms, commensurate with its strong financial position and robust capital structure.”

    “For international investors, it represented an attractive option to gain exposure to Nigeria,” it added.

    Commenting on the issuance, Managing Director of Ecobank Nigeria, Mr. Patrick Akinwuntan, said: “Despite the challenging global environment owing to the COVID-19 pandemic, and on the back of a successful N50 billion tier-2 issuance in December 2020, Ecobank Nigeria was able to successfully issue and price Nigeria’s first 2021 senior unsecured 5-year bond transaction. “Ecobank Nigeria, through this issuance, is being proactive in optimising its capital structure as it continues to drive its medium term growth strategy of establishing itself as a leading facilitator of pan-Africa and international trade and payments.”

    Akinwuntan added: “I would like to extend my appreciation to our regulators, the Central Bank of Nigeria, for their timely support and continuous guidance, in granting necessary regulatory approvals.”

  • Investors oversubscribe Nigeria’s 30-year bond by 400%

    On Wednesday, the Debt Management Office (DMO) issued the first 30-year FGN bond, offering N20 billion worth of the note to interested investors.

    At the close of the auction Thursday, the debt office said it received subscriptions valued at N80.41 billion from investors, representing a 400 percent subscription rate.

    According to details of results of the exercise, the paper was sold to investors at an interest rate of 14.80 percent, which would be paid semi-annually to holders.

    Recall that during the bond auction on Wednesday, the DMO offered three maturities in 5-year, 10-year and 30-year and received total subscriptions of N149.30 billion, representing a total subscription level of about 150 percent.

    A total of N40 billion worth of the 5-year bond, N40 billion worth of the 10-year bond and N20 billion worth of the 30-year bond were auctioned yesterday.

    At the end of the sale, the debt office allotted a total of N97.40 billion to successful bidders at 14.50 percent for the 5-year, 14.55 percent for the 10-year and 14.80 percent for the 30-year FGN bond.

    Director-General of DMO, Ms Patience Oniha, explained that, “The bulk of the subscriptions came from asset managers and insurance companies who have been looking for long-term, good quality assets to buy in order to match their liabilities.”

    She said, “With the success of the 30-year bond offering, the DMO has reinforced its pioneering role in the domestic capital market by introducing another longer-dated instrument which for the government, represents appropriate funding for infrastructure and an effective tool for spreading out its liabilities, while for the private sector, it provides an avenue for other issuers, such as corporates, to access longer-term funding for their projects.”

  • FG to issue N20bn 30-year bond on April 24

    The Debt Management Office (DMO) says the Federal Government will on April 24, issue a 30-year bond for the first time.

    The DMO said in a circular on its website on Wednesday in Abuja, that the N20 billion 30-year paper would mature in April 2049.

    Other bonds on offer are a 10-year new issue of N40 billion to mature in April 2029 and a five-year re-opening of N40 billion to mature in April 2023, which was offered at 12.75 per cent.

    The circular, however, did not indicate the interest rates for the new issues.

    Ms Patience Oniha, the Director-General, DMO had at a news conference on April 4, revealed plans by the Federal Government to issue the 30-year paper.

    She said that the bonds were considered, given the relatively low interest rates compared to 2017 levels of more than 18 per cent.

    “The issuance of the bond will meet the needs of annuity funds and other long term investors while also developing the domestic capital market and reducing the re-financing risk of the Federal Government.

    “Another area of focus will be the management of risks associated with the debt stock to mitigate debt service costs.”

    She added that the 30-year issue would enable government raise long-term capital for infrastructure, serve as benchmark for private sector raising of long-term investment capital.

    It would also reduce short-term debt and deepen the Life Insurance sector in particular.

    According to DMO, units of sale is N1, 000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

    The bonds are backed by the full faith and credit of the Nigerian Government, with interest payable semi-annually to bondholders, while bullet repayment will be made on maturity date.

    Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

  • 2019 Budget: FG Needs N10trn Bond for Roads, Power – Fashola

    2019 Budget: FG Needs N10trn Bond for Roads, Power – Fashola

    From Jonas Ike, Abuja
    Minister of Power, Works and Housing, Babatunde Fashola, says Nigeria needs at least N10 trillion bond to develop key infrastructures such as roads and power.
    Fashola gave the hint on Monday during a budget defence session with the House of Representatives Committee on Works, chaired by Hon.Toby Okechukwu (PDP, Enugu) at the National Assembly.
    The Minister, who was reacting to questions by members of the Committee over failing roads in Nigeria, noted that funding remains a major constraint behind road construction and maintenance.
    According to him, only a long term infrastructure bond, backed up with viable legislative framework, would take care of failing infrastructure in the country, and thus drive critical aspects of the economy.
    He also advised for caution on the application of the Road Fund Bill, recently signed by President Muhammadu Buhari, so as not to “raise expectations above realities.”
    “We have to challenge ourselves to access revenue to fund our roads. But since the budget is limited, we must subscribe to realities.
    “I want to say that Nigeria needs N10 trillion infrastructure bond, through legislative approval, to effectively fund our roads and power.
    “Critical infrastructures, such as roads, are national social investments meant to encourage the growth and development of other aspects of the economy,” Fashola told the lawmakers.
    Earlier in a remark, Chairman of the House Committee on Works, Hon. Toby Okechukwu (PDP, Enugu), had said the Road Fund Bill provided a take-off point for road funding initiative in Nigeria.
    Other lawmakers as Sunday Karimi (PDP, Kogi) and Sani Abdu (APC, Bauchi), both members of the Committee, also raised issues over the Kabba-Obajana, Bauchi-Alkaleri, and Enugu-Port Harcourt roads, saying Nigerians expected miracles from the Minister given his precedents as Lagos governor.
    They further appealed to him to ensure that the second phase of the SUKUK bond initiative is directed towards the completion of pending road projects littered across the country.

  • Nigeria needs N10trn infrastructure bond to curb deficit – Fashola

    The Minister of Power, Works and Housing, Mr Babatunde Fashola, has said that N10 trillion infrastructural bond was needed to meet up with infrastructural deficit and advance the course of Nigeria’s development.

    Fashola made this known on Monday in Abuja at a meeting with members of the House of Representatives Committee on Works to defend his ministry’s 2018 budget performance and 2019 budget.

    The minister received legislative commendations from the committee for his achievements so far in the road sector.

    Speaking on his achievements, the minister the said while government was constrained to operate within the current budgetary limits, it had considerably scaled up performance, using the Sukuk Bond over which government had no allocation control.

    Fashola, therefore, called for a N10 trillion infrastructure Bond which he noted could take care of the nation’s infrastructural issues and deficit going forward.

    “If such is created, we can draw from it without resorting to the annual budget, but of course with legislative backing to solve our problems once and for all’’, he said.

    The minister, however, expressed confidence in President Muhammadu Buhari’s willingness to sign the Road Infrastructure Fund Bill, provided” the provisions don’t conflict with existing laws governing the sector.”

    Lawmakers also took the minister up on his 7-point priorities, noting that the pace of implementation left much to be desired.

    They said many roads and bridges across the country had become death traps – failing even while still under construction with many others still waiting for attention.

    Addressing the issue of road construction and rehabilitation, relative to the availability of fund from annual appropriations, the committee chairman, Rep. Toby Okechukwu, said the minister had done well.

    According to him, the minister has done considerably well in the light of inadequate cash flow from budgetary releases.

    The chairman, however,asked the minister to intimate the committee on how the 2019 budget could capture road maintenance in the country, “so that existing roads don’t fail as obtained in the past.”

    A breakdown of the 2018 appropriation showed that N715.6 billion was allocated to the ministry, out of which N399.4billion was for capital.

    The main Ministry, he said got N56.7billion while Parastatals got N42.639billion, and Overhead for the ministry took N13.23billion, while Personnel cost gulped N17.25billion

    On the Implementation, N144.263billion was released for capital, representing 40.4per cent of the appropriation.

  • FG plans issuance of N10.6bn bond to finance renewable energy – DMO

    FG plans issuance of N10.6bn bond to finance renewable energy – DMO

    The Director-General, Debt Management Office, DMO, Patience Oniha, has said the federal government is planning to issue N10.6 billion green bonds to finance renewable energy projects to protect the environment.

    Mrs. Oniha said this in Abuja on Thursday at the Nigeria Green Bond Investors Forum organised by the federal ministries of environment and finance, in collaboration with Green Bond Advisory Group.

    She said that the forum was to educate prospective investors in the Green Bond programme to know the benefits of investing in green bond projects.

    The director-general said the federal government acted to borrow the N10.6 billion, in line with its borrowing agenda contained in the 2017 budget.

    According to her, more funds will be allocated to finance green bond projects in the subsequent budgets.

    Mrs. Oniha said that the bonds would be used to finance three renewable energy projects, which were Renewable Energy Micro-Utilities Programme, Re-energising Education Programme and Afforestation Programme.

    Also speaking, Halimat Bwari, the Deputy Director, Department of Climate Change, Federal Ministry of Environment, said that N142 billion would be required to finance renewable energy projects in the country.

    Ms. Bwari said that the ministry decided to issue the Green Bond as alternative source of funding because of the huge capital outlay required to finance the nation’s renewable energy projects.

    She noted that the bond would boost the nation’s economy and protect the environment.

    Besides, Ms. Bwari said, the ministry had inaugurated five low-carbon growth projects.

    She listed the projects as the Rural Energy Access, the Great Green Wall Programme, the National Clean Stoves Scheme, the Clean Energy Transportation Scheme and the Nigerian Erosion and Watershed Management Project.

    She said that the projects would go a long way to reduce carbon emissions in Nigeria, while facilitating the country’s efforts to meet its commitments in the Paris Agreement on Climate Change.

    The News Agency of Nigeria reports that stakeholders that participated in the forum include Pension Funds Administrators (PFAs), Federal Ministry of Finance, Inter-ministerial Committee on Climate Change and Nigerian Stock Exchange.

    Others are DMO, Central Bank of Nigeria, Securities and Exchange Commission, the World Bank and Chapel Hill Denham as well as representatives of private sector organisations.
    (NAN)

     

  • FG allots N738.14m in August savings bond sales

    FG allots N738.14m in August savings bond sales

    The Federal Government allotted N738.14m in its August 2019 and 2020 savings bond sales.

    The Debt Management Office on its website on Wednesday said that N215.64m was allotted at 13.53 per cent with 328 successful subscriptions to mature in August 2019.

    It stated that N522.50m was allotted at 14.53 per cent with 433 successful subscriptions to mature in August 2020.

    The savings bond issuance is expected to help finance the nation’s budget deficit.

    The bond issuance is part of the Federal Government’s programme targeted at the lower income earners to encourage savings and also earn more income (interest), compared to their savings accounts with banks.

    The bonds are debt securities (liabilities) of the Federal Government backed by its ‘full faith and credit’.

    Interests are to be paid at regular periods and principal repaid at maturity.

    The bonds have a tenure of between two to three years and a minimum size of investment of N5,000 and maximum of N50m.

    The bond is aimed at deepening national savings culture, diversifying funding sources for the government and providing an opportunity to all citizens, irrespective of income level to contribute to national development.

    It will also enable all citizens to participate in and benefit from the favourable returns available in the capital market.

    According to the DMO, the next offer will open on Sept. 11 and close on Sept. 15.