The Federal Government of Nigeria is set to issue a $500 million domestic dollar bond next Monday, aiming to attract both local and foreign investors. This move is part of the government’s strategy to raise funds for economic development projects and attract international investment.
Dr. Gbadebo Adenrele, the Managing Director of Investment Banking at United Capital Group, made this announcement during a roadshow organized by the Debt Management Office (DMO) on Thursday. This roadshow was held in a hybrid format, combining both physical and virtual meetings with potential investors.
Dr. Adenrele shared details about the bond, noting that it will be the first of its kind in Nigeria. The bond will have a five-year term, with the principal amount fully repaid at the end of this period. Interest payments will be made every six months. The bond will also be listed on major financial platforms such as the Nigerian Exchange Limited (NGX) and FMDQ, which will make it accessible to a wide range of investors.
“This bond aims to provide a structured repayment schedule that should give investors confidence,” Dr. Adenrele said. He added that the bond’s listing on NGX and FMDQ will enhance its accessibility and liquidity.
Finance Minister Wale Edun has confirmed that the government, along with its financial advisors, is ready to launch the bond. He described the upcoming bond issuance as a significant step, stating, “We are eagerly looking forward to not just the funds but also the involvement of Nigerians in this important process. This bond is another tool for our financial strategy.”
Edun highlighted that the bond will help channel funds into sectors crucial for Nigeria’s economic growth. The DMO’s Director General, Patience Oniha, mentioned that the bond auction’s settlement date is expected to be about ten days after the auction.
Earlier reports from indicated that the Federal Government aimed to raise at least $500 million from this bond issue but has a broader goal of securing up to $1 billion in total subscriptions. The bond program has a total potential size of up to $2 billion, depending on the demand and issuer’s discretion.
Investors interested in this bond can subscribe with a minimum amount of $10,000, with additional investments in multiples of $1,000. The bond’s proceeds will be directed into critical sectors, as approved by the President and the National Assembly.
One notable feature of this bond is its tax-exempt status on interest payments, which could make it an attractive option for investors. The bond will also benefit from additional exemptions as specified by the Federal Inland Revenue Services (FIRS).
The Federal Government’s move to issue a dollar-denominated domestic bond is seen as a strategic effort to boost investor confidence and attract international capital. By offering a bond with structured repayments and tax benefits, Nigeria is positioning itself as a favorable investment destination.
