Nigeria’s First Domestic Dollar Bond Secures $900m in Landmark Issuance

Nigeria’s first-ever foreign-currency domestic bond has garnered an impressive $900 million in subscriptions, reflecting robust investor confidence in the country’s economic potential. The announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who hailed the oversubscription as a significant milestone for Nigeria’s financial sector.

Edun, discussing the results on Tuesday, noted that the successful issuance of the $500 million domestic FGN US Dollar Bond marks a crucial step towards deepening economic growth and promoting financial inclusion. He underscored that the achievement demonstrates the government’s commitment to diversifying funding sources amid ongoing economic challenges.

“The issuance of this inaugural domestic FGN US Dollar Bond highlights the continued faith investors have in Nigeria’s economy,” Edun stated, pointing to the oversubscription as evidence of growing optimism surrounding the nation’s fiscal stability.

The landmark bond attracted a diverse group of investors, including both domestic and diaspora Nigerians, as well as institutional investors. The proceeds will be directed to critical economic sectors, as outlined by President Bola Ahmed Tinubu’s administration, aimed at stimulating growth and addressing key infrastructural needs.

This domestic bond, with a five-year maturity and a 9.75% coupon rate, is part of a broader $2 billion bond programmeregistered with the Securities and Exchange Commission. Notably, the bond’s structure allows for the government to absorb oversubscriptions up to the full $2 billion programmelimit. The $900 million raised in this first tranche signals significant interest, laying the groundwork for future issuances.

Patience Oniha, Director-General of Nigeria’s Debt Management Office, described the bond’s success as a pivotal moment in the nation’s economic trajectory. “The $900 million raised from a wide range of investors showcases the growing sophistication of Nigeria’s domestic fixed-income market,” she remarked, adding that this move will open further opportunities for the government to tap into domestic capital markets.

Oniha also praised the collaborative efforts behind the bond issuance, crediting the expertise and dedication of all involved parties for the transaction’s resounding success. For Nigeria, this bond not only represents a vital financial tool to bolster key sectors but also reinforces investor confidence at a time when the global economic landscape remains uncertain.

The successful debut of Nigeria’s foreign-currency domestic bond is expected to pave the way for similar offerings, providing the government with a critical funding channel while simultaneously expanding the country’s financial market. In a time of economic readjustment, this oversubscription demonstrates that Nigeria remains an attractive destination for investment, both domestically and internationally.

With the potential for further issuances under the $2 billion bond programme, Nigeria’s economic outlook appears increasingly buoyant, driven by strategic financial initiatives and renewed investor engagement.