‘FG to plug deficit with $300 million from Diaspora bond’
The Director General, of Debt Management Office (DMO), Ms. Patience Oniha, has said that funding the budget deficit and refinancing debt portfolio were the reasons for raising the $300million Diaspora bond and $3 billion Eurobond.
According to Mrs Oniha, both offers were issued with significant features. ‘The $300 million Diaspora bond unveiled with 5-year tenor and 5.625 per cent coupon. The Eurobonds issuances came in two tranches of $1.5 billion 10-year offer with 6.50 percent coupon and another $1.5 billion 30-year offer priced at 7.625 per cent coupon.’
Oniha noted that the $300 million Diaspora bond would boost the country’s profile with Nigeria’s first ever SEC registered debt instrument, support the FGN’s drive towards economic diversification from oil revenue and sustain momentum in tapping the international markets following prior issuance.
The DMO boss added that another benefit of borrowing from international market was that it would give private sector the opportunity to borrow at good rate as government borrow with high interest in domestic market thereby crowding out the private sector.
The exercise, she added, would give more visibility to the domestic debt capital market and be beneficial for attracting capital from local and foreign investors.
“Also, for the Eurobond, which remains a sovereign security, the information it would provide such as coupon, yield, and tenor will serve as benchmarks for corporates who may issue Eurobonds in the ICM.”
She stated that the DMO is committed towards meeting the needs of its diverse group of investors as well as supporting the development of the domestic capital market.
She said the listing of the Diaspora bond and the Eurobonds are examples of the various ways in which it exercises its borrowing powers on behalf of the Federal Government of Nigeria to support the development of the domestic capital market.
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