The International Finance Corporation, IFC, yesterday, announced that it will float $50 million (an equivalent of N8 billion) bonds to support the Nigerian capital market.
The First Vice President and Treasurer, IFC, Mr. Jingdong Hua, who disclosed this at the bell ringing ceremony on the Nigerian Stock Exchange, NSE, as a first step towards the formal listing on February 1, said that it was the first naira denominated bond by the corporation and the first of its kind in the emerging markets.
He said the bond, which has a five-year tenor, was a collaborative effort of the corporation, the Central Bank of Nigeria, the Ministry of Finance and other regulatory agencies.
Hua observed that the choice of Nigeria followed a strong indication of emergence of the country as the investment destination of choice, not just in Africa, but globally.
According to him, the $50 million bonds would give birth to the listing of various other bonds to be termed ‘Naija bonds’ from the corporation, adding that the slogan so chosen was representative of Nigeria spirit of hardwork and patriotism.
He explained that proceeds from the bonds would be deployed towards the completion of the corporation’s pipeline project, support its private sector development programme, as well as support the Federal Government’s infrastructure.
He said: “The IFC Naija bond will be a milestone achievement as we continue to work with governments and local authorities to strengthen domestic capital markets in the region.”
He noted that the IFC Naija bond is targeted at investors such as pension funds, insurers, asset managers, and banks who seek to diversify their portfolio while investing in high-quality assets.
Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria, said: “The IFC Naija bond will support the government’s efforts to deepen domestic capital markets in Nigeria.”
Also speaking, Executive Director, NSE, Mr. Adeolu Bajomo, said the listing would mark a novel achievement in the annals of the Nigerian capital market, as this was the first emerging market to have IFC bonds listed on it.
He expressed optimism that this would launch the Nigerian Stock Exchnage into limelight in international market.
IFC issues bonds as part of its regular program of raising funds for private sector development, and to support the development of domestic capital markets.
In many cases IFC is the first, or among the first, nonresident issuers. As at June 30, 2012, IFC had outstanding bond issuances totaling $45 billion in 11 currencies.
The IFC Naija bond is the result of a collaborative process among IFC, the Nigerian government and regulatory authorities, and market participants.