Diaspora Bond FG raises $300 million from Nigerian living abroad

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This development will surely increase Nigeria’s credit ratings and would enhance the country's opportunity to routinely access funds from U.S and European debt markets.

Director General of DMO, Dr Abraham Nwankwo and Minister of Finance, Mrs Kemi Adeosun play

Director General of DMO, Dr Abraham Nwankwo and Minister of Finance, Mrs Kemi Adeosun

(DailyTrust)
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The Debt Management Office (DMO) has announced that the debut issue of Nigeria’s Diaspora Bond was over-subscribed by 30%.

The Director General of DMO, Dr Abraham Nwankwo stated in a statement released on Monday, June 19, 2017, that the diaspora bond received huge acceptance from Nigerians living abroad as total subscription was 130% of the issued value.

It would be recalled that the Federal Government had taken a move to source funds from Nigerians living in Diaspora as part of their contributions to the development of the country.

The government issued a $300 million bond at a coupon rate of 5.625% for a tenure of five years, and was mainly targeted at the retail investors as against the traditional institution investors. 

Dr Nwankwo also stated that the bond was structured as retail instruments to appeal to a wide range of investors, through their private banks and wealth managers.

Diaspora Bond play

Diaspora Bond

(TVC News)

Also Read: FG to issue 'Diaspora Bond' for infrastructure funding

He continued that the instrument received a considerable interest from the investors all over the world with initial orders of about 190% of issued amount, but a final subscription is around 130% of the issue.

“The diaspora bond has opened a new source of financing for the Federal Government of Nigeria for funding projects for the development of the country.

“This new window further enhances funding liquidity and flexibility of the Nigerian economy, which are necessary characteristics as the country gathers momentum towards the attainment of advanced economy status,” he said.

Nigeria’s Minister of Finance, Mrs Kemi Adeosun also expressed satisfaction with the outcome of the issue stating that the U.S Securities and Exchange Commission’s (SEC) approval greatly impacts the outcome of the issuing.

“To have received the approval of the U.S. SEC was indicative that the highest level of transparency and accountability in the economic process has been attained.”

“The Diaspora Bond is the first bond issued by an African sovereign registered with both the U.S. SEC and the United Kingdom Listing Authority (UKLA) and targeted at retail investors,” she stressed.

With this issue, Nigeria is the first African country to issue a sovereign bond targeted at retail investors in the United States.

Both officials of government noted that this development would increase Nigeria’s credit ratings and now means that the country has the opportunity to routinely access funds from U.S and European debt markets.