Nigerian govt issues $500 million five-year domestic dollar bond at 9.75%

The Federal Government of Nigeria has issued a $500 million dollar-denominated bond, opening for subscription on August 19, 2024, officially.

This comes after the government had announced plans to issue a $500 million dollar-denominated bond.

This bond, part of the government’s financing initiatives, will carry a 9.75 percent per annum interest rate and is set to mature in 2029.

Accordingly, the auction for the bond will remain open until August 30, 2024, giving investors a sufficient window to participate in this offering.

Further details showed that the settlement date, when investors will have their purchases confirmed and interest will begin accruing, is set for September 6, 2024.

This becomes a significant step in Nigeria’s financial strategy, providing an opportunity for investors both within and outside the country.

The bond is structured as a five-year investment, with coupon payments made semi-annually.

Investors can purchase units at a minimum of $1,000 each, with an initial minimum subscription set at $10,000 (10 units). Subsequent investments can be made in multiples of $1,000.

The redemption of the bond will occur through a bullet repayment at the end of the five-year term, ensuring that investors receive their principal in full upon maturity

Recall that Minister of Finance, Wale Edun had announced plans to commence the bond issuance to catalyse the Nigerian economy.

This is as the Director General of the Debt Management Office (DMO), Patience Oniha, explained that the settlement for the $500 million dollar-denominated bond auction would be 10 days after the auction date.