AFDB Launches Bond Denominated in Nigerian Naira
Tunis, 22 January 2007 – The Bank has successfully launched its first bond issue denominated in Nigerian Naira (NGN). The issue, launched early last week, has a maturity of one year, a face value of NGN 127.80 million (the NGN equivalent of USD 100 million) and a fixed coupon of 9.25%.
"This is a remarkable achievement for the Bank: it is the first NGN-denominated note to be issued by a supranational; it is the Bank’s largest issue denominated in a local currency to date; and it is the Bank’s first issue with an Africa-based lead manager—Standard Bank, Africa’s largest bank by capital", the Bank Group’s treasurer, Stefan Nalletamby, said.
In addition, the note is listed on the Luxembourg Stock Exchange and clears through Euroclear and Clearstream. Moreover, the note has led to the first cross-currency interest rate swap executed by a domestic Nigerian bank—First Bank of Nigeria, Standard Bank’s partial hedge counterparty. Finally, the note is the first investment-grade money-market instrument that offers non-residents exposure to Nigeria while allowing trading flexibility and settlement through international clearing houses.
Mr. Nalletamby said the issue was received with enthusiasm, attracting investors from the United States-Offshore (52%), the United Kingdom (31%), Continental Europe (15%), and the Middle East (2%). Banks accounted for USD 22 million, funds and asset managers accounted for USD 77.9 million, and retail accounted for USD 0.1 million.
The Naira bond follows sales last year in Botswana Pula, Tanzanian Shillings and Ghanaian Cedi.
The Bank may sell debt in other African countries later this year, he said, adding, "other markets in Africa are under consideration as well as re-issuance in markets that the Bank has already opened".