Nigeria to Issue $500m Domestic Bonds to Investors
The Federal Government of Nigeria (FGN) has introduced its series-1 domestic US dollar-denominated bond as it hopes to raise at least $500 million from local and international investors.
The bond- the first dollar-denominated instrument to be launched locally is five years tenured and will offer a medium-term investment opportunity for investors looking for stable returns. The bond is benchmarked against the federal government’s Eurobond yield.
Under this first series, the government, however, hopes subscriptions could upscale to US$1 billion, considering the increasing appetite for Nigerian instruments. The size of the entire domestic dollar bond program is US$2 billion – though it could be increased by the federal government if necessary.
The bond is open to Nigerians and non-Nigerians resident in the country; Nigerians in Diaspora; as well as qualified institutional investors. Pension funds are also eligible to invest in the instrument.
The document confirmed that the bond offer, closing and settlement will all happen this August as planned, though no specific days were given just yet.
As stated earlier in a Presidential Executive Order, the net proceeds and its accretion will be ring-fenced and then invested in critical sectors to be approved by the President- though on the recommendation of the finance minister and subject to appropriation by the National Assembly.
Also, bondholders are exempted from income tax on accumulated interests. They will also enjoy some other exemptions as stated in a notice issued by the Federal Inland Revenue Service (FIRS).
The bond will be listed and admitted for trading on the Nigeria Stock Exchange as well as the Financial Markets Dealers Quotation (FMDQ). #Nigeria to Issue $500m Domestic Bonds to Investors
