By Gbenga Agbana

Tuesday, 1 Feb 2011

Nigeria’s first sovereign debt issue was on Monday, admitted to trading on the London Stock Exchange’s main market.

The bond, which successfully raised $500m, offers an annual interest rate of 6.75 per cent per year, and matures in January 2021.

The offering creates a benchmark United States dollar bond yield curve that should lead to lower borrowing rates for Nigerian companies issuing corporate bonds in the domestic and international markets. This is because cheaper and easy to access debt finance is fundamental to the growth prospects of Nigerian companies.

The Head of Business Development, Africa, London Stock Exchange Group, Mr. Ibukun Adebayo, said in a statement on Monday, “We are delighted that the Nigerian government chose our markets to issue its first sovereign debt, kick- starting the next phase in the development of the Nigerian corporate bond market. The fact that London was selected for such a significant transaction reflects the city’s status as the world’s most international financial centre, with the knowledge and expertise to successfully price a brand new sovereign bond.”

Citigroup and Deutsche Bank acted as joint lead managers and book runners, while FBN Capital acted as financial advisers to Nigeria and White and Case LLP acted as legal advisers.

When contacted for confirmation of the listing on Monday, an official at the press office of the LSE, Mr. Alastair Fairbrother, informed our correspondent through an e-mail message that the listing took place on Monday.

The Minister of Finance, Mr. Olusegun Aganga, also said, “The notes have been admitted to the official list of the United Kingdom listing authority and has been admitted to trading on the Regulated Market of the London Stock Exchange.”

The London Stock Exchange Group is at the heart of the world’s financial community.

The Group operates a broad range of international equity, bond and derivatives markets, including LSE; Borsa Italiana; MTS, Europe’s leading fixed income market; and Turquoise, offering pan-European and US lit and dark equity trading.

Source: Punch