FG launches $500m domestic bond, auction to begin on Monday

The federal government says its dollar-denominated domestic bond will be issued on Monday.

Gbadebo Adenrele, managing director of investment banking, at United Capital Group, spoke on Thursday during a hybrid roadshow with investors organised by the Debt Management Office (DMO).

On July 25, the federal government said it would issue $500 million in domestic foreign currency-denominated bonds in August.

Adenrele said the bond is expected to offer periodical repayments at maturity in dollars and full repayment of the principal amount at the end of a five-year term and will be listed on the Nigerian stock exchange.

He said the goal is to raise $500 million from local and foreign investors.

“The auction will open next week on Monday. Next week Monday, we will have that open, and the details of that will be communicated to the market,” he said.

“One of the key aspects of this bond issuance is that it will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors.

“The principal will be repaid after five years, with interest payments made every six months. This structured repayment schedule is designed to provide confidence to investors.”

Confirming the announcement, Wale Edun, minister of finance and coordinating minister of the economy, said the country, alongside its financial advisors, is ready to launch the bond.

“In the financial market, you never know. When you wake up and you see an event that helps the issue, you will take advantage of it,” the minister said.

“But we can assume that we are imminently about to launch. We are eagerly looking forward to not just the funds but the experience of Nigerians taking leadership in this all-important area.

“We must also mention that it is another arrow in the quiver.”

Edun said the bond is a strategic move to channel funds into sectors that will catalyse economic growth in the country.

On her part, Patience Oniha, director-general of the DMO, said the settlement date for the domestic dollar bond auction will likely be 10 days after the auction date.