The Federal Government of Nigeria has launched its Series I Domestic USD Bond with the intention of raising at least $500 million from domestic and foreign investors.
According to the circular, the government aims to double its initial offer, targeting $1bn in subscriptions through this bond auction.
However, this auction comes at a time when five of Nigeria’s Eurobonds were ranked among the worst performers in a Bloomberg index of emerging and frontier sovereign debt, according to The Punch.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had previously declared that the government would issue $500m domestic foreign currency-denominated bonds in August.
According to Edun, the government needs to attract savings from Nigerians in the diaspora.
“We are using the Nigerian financial system, the Securities and Exchange Commission, the banking system, the investment bankers to issue $500m in the first instance that will be available and will attract foreign currency held by Nigerians abroad and anybody else who buys into the macroeconomic reform efforts of President Bola Tinubu,” he said in an interview.
The bond program, according to the circular, has a maximum value of $2.0 billion, although the issuer may choose to increase it.
Thee bond presents a medium-term investment option with a five-year tenor, for those seeking steady returns.
Additionally, it was mentioned that the bond’s coupon rate is benchmarked to the rates of comparable FGN Eurobonds, guaranteeing competitive returns that conform to global market standard.
Interest payments will be made semi-annually, providing regular income streams to investors and enhancing the bond’s appeal.
