Nigeria’s debut Sovereign Green Bond offer in December 2017 was oversubscribed, as total subscription received was 10.79 billion naira compared to the 10.69 billion naira offered.
According to the Debt Management Office, some of the investors who subscribed to the green bond include banks, pension funds, asset managers and retail investors.
The DMO says this shows investors’ interest in new products and support for the objective behind the issuance of the bond which is to invest in projects that will contribute to preserving the environment.
The Sovereign Green Bond was offered for a tenor of five years with a coupon of 13.48 per cent.
The Debt Management Office (DMO), on Friday, said it plans to auction N140 billion in bonds on June 21.
The debt office will use the Dutch auction system to sell N40 billion of bonds due to mature in 2021 and N50 billion each for bonds due in 2027 and in 2037.
Settlement of the bond issue is expected the day after the sale, while the bonds are re-openings of previous issues.
It is expected to raise money to cover more than half the deficit from the local market.
Nigeria’s Debt Management Office (DMO) will on June 13 commence a ten-day roadshow in the United States, UK and Switzerland, for the country’s first diaspora bond of 300 million dollars.
The debt office has filed a registration statement for the bonds with the U.S. Securities and Exchange Commission.
The DMO said an application would be made for the bonds to be admitted to the official list of the UK Listing Authority and the London Stock Exchange to ensure that the bonds were admitted to trading on the London Stock Exchange’s regulated market.
The debt office, however, expects pricing for the bonds to occur following the investor meetings and subject to market conditions.
President Muhammadu Buhari has requested state governors to pay at least 25% of the refunds made to them from excess deductions for external debt service, to be used to settle outstanding workers’ entitlements.
The President made the call as he approved the sum of 552.74 billion naira to be paid in batches to all the states that are owed.
However, the states are expected to receive 25% of their approved sums in the first instance before the week runs out. There are about 33 states in the bracket.
A statement by his spokesman, Mr Garba Shehu, revealed that the refunds arose following the claims by the states that they had been overcharged in deductions for external debt service between 1995 and 2002.
In a directive through the Minister of Finance, Kemi Adeosun, President Buhari said that the issue of workers’ benefits, particularly salary and pensions must not be allowed to continue as a national problem and should be tackled with all the urgency that can be summoned.
When he assumed office in 2015, the President declared an emergency over unpaid salaries after he discovered that 27 out of Nigeria’s 36 states had fallen behind in payments to their workers, in some cases for up to a year.
Following this, a bailout loan was issued to the states twice with a first batch of about 300 billion naira given to them in 2015 in the form of soft loans.
The administration also got the Debt Management Office (DMO) to restructure their commercial loans of over 660 billion naira and extend the life span of the loans.
Because this did not succeed in pulling many of the states out of distress, the Federal Government consequently gave out an additional 90 billion naira to 22 states in 2016, as yet another bailout loans under very stringent conditions.
President Buhari has expressed the opinion all the time that the payment of salaries and pensions must be given priority to save both serving and retired workers and their families from distress.
The Director-General of the Debt Management Office (DMO), Dr. Abraham Nwankwo, has explained that the position of the DMO is not contradictory to the Nigerian government’s external borrowing plan of 29.6 billion dollars.
Speaking on Channels Television, Dr. Nwankwo explained that there are major benefits of the external borrowing plan of the federal government.
He stated that the loan, if approved by the National Assembly, will bridge the infrastructure deficit in the country.
“The external borrowing programme which Mr President has placed before the National Assembly for approval covering three years is for the federation. It covers projects in all the states.
“As you know in Nigeria, there is no physical geographical location known as the federal government. So all the railways, rural water projects, education, health and road projects are in one state or the other”.
He added that Nigerians need to understand the importance of borrowing programme before the National Assembly as presented by the President, as it is for everybody.
‘No Ambiguity’
Dr Nwankwo further said that there had been an erroneous publication in the dailies regarding the DMO’s position on the loan and the office has been making efforts to correct the wrong impression.
The Debt Management Office had fixed the maximum limit for the federal government’s domestic and external borrowing at 22.08 billion dollars for the 2017 fiscal year.
Nwanwko said that this does not negate the government’s plan to borrow about 30 billion dollars since this is a medium term external borrowing plan that spread across three years – 2016 to 2018.
“So on the average you are talking of about 10 billion dollars per annum. So that is settled,” he said, insisting that there is no ambiguity in the matter.
“If you advise government to borrow a maximum of 22 billion dollars for one year and we have a medium term borrowing programme for 29.9 for three years, it has no contradiction.
“The 10 billion per annum that comes from 29.9 for three years is much below the 22 billion maximum for one year. So that should be very clear, there is no ambiguity.”
The fixing of the 22.08 debt limit is part of policy recommendations of the Debt Management Office contained in its 2016 report of the annual national debt sustainability analysis.
According to the management office, new domestic borrowing has been pegged at 5.52 billion dollars, while new external borrowing is put at 16.56 billion for 2017.
The report explains that, the present value of ‘total public debt to GDP’ ratio for 2016 for the federal government is projected at 13.5 percent with an available borrowing space of 5.89 percent of the estimated GDP of 374.95 billion dollars for 2017.
The management office also recommended that government should explore other alternative and viable sources of financing for the country’s huge infrastructure requirements.
The Debt Management Office says loans accrued by Nigeria from the World Bank has risen to 6.29 billion dollars.
Latest debt figures from the DMO show the World Bank’s total commitment to the country stood at 6.29 billion dollars as at December 31, 2015, as against 3.94 billion dollars as the end of 2011.
This means that within a period of four years, the bank’s portfolio in the country grew by 2.35 billion dollars, representing an increase of 59.64% within the period.
With this development, the World Bank group is Nigeria’s highest external creditor with 58.72% of the nation’s total external debt profile.
The Debt Management Office, (DMO) has announced plans to raise N75 billion through the sale of bonds with maturities of between five and ten years at its regular auction on August the 15th.
In a public notice released on Friday, the DMO said it would sell N25 billion apiece of five-, seven- and 10-year bonds with terms to maturity of four years and seven months, six years and nine months, and nine years and four months in that order.
The debt instruments are re-openings of previous issues.
The debt office added that it reserves the right to alter the amount allotted in response to market conditions.
The DMO issues sovereign bonds monthly to support the local bond market to create a benchmark for corporate issuance and to help the Federal Government fund its budget deficit.
The Federal Government on Thursday said it plans to raise about N75 billion through sovereign bonds ranging between 5 and 10 and its regular auction on July 18.
This was made known on by the Debt Management Office(DMO) in Abuja.
The debt office said it would sell N25 billion each in the 5-, 7- and 10-year paper with term-to-maturity of four years and eight months, six years and 10 months, and nine years and five months respectively.
According to the Debt office “The DMO reserves the right to alter the amount allotted in response to market conditions,” Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
Nigeria’s debut Sovereign Green Bond offer in December 2017 was oversubscribed, as total subscription received was 10.79 billion naira compared to the 10.69 billion naira offered.
The Debt Management Office (DMO), on Friday, said it plans to auction N140 billion in bonds on June 21.
President Muhammadu Buhari has requested state governors to pay at least 25% of the refunds made to them from excess deductions for external debt service, to be used to settle outstanding workers’ entitlements.
The Director-General of the Debt Management Office (DMO), Dr. Abraham Nwankwo, has explained that the position of the DMO is not contradictory to the Nigerian government’s external borrowing plan of 29.6 billion dollars.
The Debt Management Office says loans accrued by Nigeria from the World Bank has risen to 6.29 billion dollars.
