Nigeria’s first domestic dollar bond records 180% oversubscription

The $500 million bond, coordinated by the Africa Finance Corporation (AFC), marks a pivotal moment in Nigeria’s economic development and highlights the growing confidence in the country’s capital market.

The five-year bond, which was issued at par with a 9.75% annual coupon, witnessed an 180% oversubscription.

This overwhelming interest from investors highlights the strong domestic confidence in Nigeria’s economic growth prospects, as well as the strategic role of the AFC in deepening the domestic capital markets.

According to a statement from the AFC, investors for this bond issuance ranged from local Nigerians and non-Nigerians residing in the country to Nigerians in the Diaspora and major institutional investors.

The bond will be available for trading on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited (FMDQ Exchange), providing a significant boost to the liquidity of Nigeria’s financial markets.

Banji Fehintola, Executive Director and Head of Financial Services at AFC, said: “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. 

“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.” 

In a separate statement, the Ministry of Finance hailed the bond issuance as a landmark achievement for Nigeria, positioning the country as a leader in financial innovation in Africa. The Minister of Finance, Wale Edun, emphasized the importance of this milestone for the country’s financial strategy.

Edun  said: “I am particularly pleased that as Chair of the African Caucus, we have launched an initiative that not only strengthens Nigeria’s economic resilience but also expands the horizon for capital markets of African economies.” 

The funds raised from this bond issuance are set to be channeled into critical infrastructure projects and development programs that will bolster Nigeria’s economic growth.

The statement noted that the bond will provide much-needed capital for these initiatives, further cementing Nigeria’s position as a leader in financial markets innovation across the continent.