…As World Bank approves $486m credit to Nigerian power grid work***
The Federal Government has floated 2.5 billion dollars aggregate Eurobonds under its Global Medium Term Note Programme.
A statement obtained from the website of Debt Management Office (DMO) on Friday in Abuja, said that the bonds comprised 1.25 billion dollars 12-year series and 1.25 billion dollars 20-year series.
The 12-year series has interest rate of 7.14 per cent, while the 20-year series has 7.69 per cent interest rate which will be repaid on maturity.
According to the statement, the offering is expected to close on or about February 23 subject to the satisfaction of various customary closing conditions.
The statement said that the offering had attracted significant interest from leading global institutional investors with a peak order of over 11.5 billion dollars.
Ms Patience Oniha, the Director General of DMO, said the successful pricing of the fifth Eurobond had conferred on Nigeria the status of issuer of Eurobonds with a strong and diverse investor base.
“This time Nigeria has priced a new 12-year bond at a yield of 7.14 per cent and a 20-year bond at a yield of 7.69 per cent, both of which are consistent in price with our existing portfolio.
“I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio with external debt at considerably lower cost.
“Also, the impact of the process has already led to a reduction in the cost of domestic borrowing, and so a double benefit for the cost of our broader debt portfolio.
“Lower domestic rates will also benefit corporate borrowers,” she said.
Mrs Kemi Adeosun, the Minister of Finance, said the proceeds of the issuance would be used to re-finance domestic debt.
The notes represent Nigeria’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.
In the meantime, World Bank has approved a 486 million dollars credit facility to Nigeria for electricity grid improvements, the lender said on Friday.
“The investments under the Nigeria Electricity Transmission Project will increase the power transfer capacity of the transmission network and enable distribution companies to supply consumers with additional power,” the World Bank said.
Nigeria’s power sector is often criticised by economists for holding back the country’s economic growth.
Businesses and households are subject to frequent blackouts, and many depend on their own generators that are expensive to run.
