Investor interest is building up on Nigeria’s $300 million bond set to debut before the end of the year, just as the Debt Management Office (DMO) advances preparations for the issue.
Abraham Nwankwo, director-general, DMO, who disclosed this, said the bond issuance had been planned for the year but the Federal Government was closely watching developments locally and globally before launching into the market.
“We are making progress. We have got the necessary approvals, both from the Federal Executive Council and the National Assembly. The transaction parties have been appointed, and we are concluding the various arrangements,” Nwankwo told BusinessDay.
“We have been in contact with various Diaspora groups. We know there is a lot of enthusiasm, a lot of interests, and our plan is that before the year ends, we should be able to issue the Diaspora bonds. But for now, we are watching both the local and global market before we can fix a definite time. But what we are sure of is it will happen this year,” he said.
Nwankwo indicated that as was done for the $500 million and $1 billion Eurobond issue, Nigerian officials would again at some point this year embark on a final road show to market the bond and the country before the instrument is floated.
The Diaspora bond was thought out to enable Nigerians living abroad reflow their earnings in form of investments and in an orderly manner to the economy. Initially conceived as a $100 million issue, it was later raised to $300 million at the instance of President Goodluck Jonathan. The proceeds of the bond will be used for specific national infrastructural projects which will facilitate further economic growth.
On the other debt instruments, like the global depository notes and inflation-linked bonds that were also conceived to deepen the nation’s bond market, the DMO boss said much progress had been made on almost all fronts, but the uncertainties in the global market had been the major constraints as government now watched closely for the most appropriate time to launch the products.
“We have reached those milestones, but just as I said in the case of Diaspora bond, our plan is to do that before the year ends. We are also watching for the most propitious time in the next couple of months, and as soon as we find the appropriate time to enter the market, we will go ahead for the issue,” he said, explaining that a product like the inflation-linked bond would not be ideal to get introduced in a time of high global economic volatility or high market uncertainty.
“A time of market uncertainties, local or global, is not the time to introduce variables into the system and to complicate issues. If you watch, for the past three years there have been a lot of developments which will make you a little cautious in introducing certain new products. So, it is better for us to wait till there is some level of stability, but it will certainly get launched,” he said.
Source: Businessday
