The International Finance Corporation has gained approval from the Nigerian government to issue its first naira-denominated bond, a senior official told Reuters on Thursday. Jingdong Hua, vice president and treasurer of the private-sector lending arm of the World Bank, said proceeds of the bond will be used to support IFC's development projects in the oil-rich nation, Africa's second-biggest economy.
Hua said the size and tenor of the bond would depend on the needs of its Nigerian clients and investor demand, and that Standard Chartered and Nigeria's Guaranty Trust Bank and Chapel Hill Denham will act as bookrunners. IFC intends to issue the bond this year, subject to market conditions, and hopes to receive regulatory approval shortly.
"We do have the necessary sovereign approval. We are going through some final regulatory written endorsement that we need to get before we can go to market," Hua said in a telephone interview. IFC will also seek approval for a bond programme in Nigeria that will enable it to issue debt over a period of years and help deepen the local capital markets.
"For us this would be just the beginning," Hua said. "Once this is done we would be very interested in pursuing a bond programme in the country where we get one approval good for many years and we can tap the market as and when we have a programme demand."
In January, IFC said it would issue more than $1 billion in local currency bonds over the next 10 years in Ghana and the eight member countries of the West African Economic and Monetary Union (WAEMU). It also has approval for a local currency bond issue in Kenya. Proceeds of the naira bond will be used to fund projects in areas such as infrastructure, said Andrew Cross, IFC's principal financial officer. "Typically, the proceeds go to whatever the priority sectors of the country are," he said. "In Nigeria, investing in infrastructure is typically a key priority."
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