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IFC Raises Size of Debut Nigerian Bond Sale on Demand

Feb. 5 (Bloomberg) -- The International Finance Corp. raised the size of its first Nigerian local-currency bond sale to 12 billion naira ($76.3 million) after investor demand was more than double the initial offering.

The lender, a unit of the World Bank, initially planned to issue 8 billion naira, increasing the amount after the order book came in at 20 billion naira, Jingdong Hua, vice-president and treasurer at the IFC, said in a phone interview from Washington today. The “Naija” bonds maturing in February 2018 were sold with a 10.2 percent coupon, he said.

Nigeria’s bond yields have dropped since JPMorgan Chase & Co., the world’s biggest underwriter of emerging-market debt, said in August it would add the country’s securities to its benchmark GBI-EM index in October last year. Barclays Plc will add Nigerian debt to its local-currency government bond index in March.

“The market is feeling hot because it’s being included in the JPMorgan and Barclays indexes,” said Hua. The bond will help “pave the way for international issuers” to sell in Nigerian currency, Hua said.

Yields on the government bonds of Africa’s biggest oil producer maturing January 2022 have fallen 97 basis points, or 0.97 percent, this year to 11.01 percent, according to data compiled today on the Financial Markets Dealers Association website.

The naira, which advanced 3.9 percent last year against the dollar, the best-performing currency in Africa, fell less than 0.1 percent to 157.3 per dollar today.

Chapel Hill Advisory Partners Ltd. in Lagos, Nigeria’s commercial capital, and Standard Chartered Plc are the lead managers on the naija bond.

Africa Lending

The IFC has a committed portfolio of $1.1 billion in Nigeria, it’s largest on the continent and eighth-largest globally. The lender announced in May a pan-African medium-term bond program, which focuses on countries including Botswana, Kenya, South Africa, Uganda and Zambia. The Naija bonds are not part of the program.

The IFC is planning to issue another one or two African local-currency bonds this year, Hua said. “We are working very hard to promote local-currency lending.”

The Washington-based lender’s investments in sub-Saharan Africa have tripled since 2006, reaching $4 billion last year.

To contact the reporter on this story: Chris Kay in Abuja at ckay5@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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