IFC to issue $50m (NGN8 billion) Naija bond in Nigeria

The International Finance Corporation (www.ifc.org), part of the World Bank group, plans to issue a $50 million (NGN 8 billion) local-currency Naija bond in Nigeria to support the domestic capital markets and increase access to local-currency finance. IFC bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s and the Naija bond is likely to appeal investors such as pension funds, insurers, asset managers, and banks wanting to diversify their portfolio while investing in high-quality assets.
It is part of an extensive programme by the IFC to issue more local currency bonds in a range of countries. IFC launched its Pan-African Domestic Medium-Term Note Programme in May 2012. It focuses on Botswana, Ghana, Kenya, Namibia, Rwanda, South Africa, Uganda and Zambia. IFC has obtained approvals to issue local-currency bonds in Kenya.
According to Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria, quoted in this IFC press release: “The IFC Naija bond will support the Government’s efforts to deepen domestic capital markets in Nigeria. It will help pave the way for other issuers in the domestic markets and makes available funds that can be put to work in the local economy.”
Jingdong Hua, IFC Vice President and Treasurer, added: “Vibrant domestic capital markets are the foundation for lasting growth—and in Africa, they can mobilize capital to close the financing gap for key sectors such as infrastructure and housing. 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.”
Local currency proceeds from the African bond will be used to support IFC’s development programme for the private sector. IFC’s committed portfolio in Nigeria stands at $1.1bn, the largest country portfolio in Africa and the eighth-largest globally. It will be the IFC’s first naira-denominated bond and the first bond placed by a non-resident issuer in Nigeria’s capital markets.
IFC issues bonds as part of its regular programme 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, non-resident issuers. Last 30 June (2012), IFC had outstanding bonds totalling $45bn in 11 currencies. Before the current programme, IFC worked with Ghana, Zambia, and 8 members of the West African Monetary Union to establish local-currency bond programmes, including bonds in CFA francs during 2006 and 2009.
The IFC Naija bond is the result of collaboration with the Nigerian Government, regulatory authorities, and market participants. Chapel Hill Advisory Partners Limited and Standard Chartered are lead managers of the transaction.
IFC is the largest global development institution focused exclusively on the private sector, financing investment, mobilizing capital and giving advice to businesses and governments. Investments reached an all-time high of more than $20bn in the 2012 financial year.

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