Rand Merchant Bank (RMB)

Rand Merchant Bank’s (RMB) International Debt Capital Markets (DCM) team assisted Bank of Industry (BOI) – Nigeria’s largest, oldest and most profitable Development Finance Institution (DFI) – to issue a €700million Eurobond by way of 144A/RegS Senior Note Participation Notes, irrevocably and unconditionally guaranteed by the Federal Government of Nigeria.

BOI, the first African National DFI to issue a public Eurobond, has a vision of transforming Nigeria’s industrial sector by providing financial and business advisory services for the establishment of large, medium and small enterprises; as well as for the modernisation of existing businesses.

BOI’s mandate is guided by Nigeria’s National Development Plan 2025 and Agenda 2050, which have the objective of lifting a hundred million Nigerians out of poverty in 10 years. The institution is tasked with providing financing for the development of micro, small and large enterprises. This deal represents the institution’s first Eurobond, provision of the sovereign’s first Eurobond guarantee as well as the first euro-denominated transaction from Nigeria, creating a benchmark for other prospective issuers from the region.

The five-year, euro-denominated senior note instrument is guaranteed by the Federal Government of Nigeria and issued at a yield of 7.500percent. BOI’s expectation was to raise up to €500million, but successfully raised €700million after a 1.5 times oversubscribed orderbook comprising high-quality buy-and-hold international investors. The transaction was preceded by an extensive three-day global virtual roadshow, including a global investor call primarily involving engagement with investors across the UK, continental Europe and the US.

The notes are to be listed on the London Stock Exchange and have ratings of B2 (Stable outlook) and B (Stable outlook) from ratings agencies Moody’s and Fitch respectively.

RMB was appointed as global coordinator and active bookrunner for the transaction alongside other banks, with RMB assisting the issuer to ensure that BOI’s unique credit story and developmental impact is best articulated to a diverse global investor base.

Chidi Iwuchukwu, Head of Investment Banking, RMB West Africa said: “It is extremely satisfying to work closely with the Nigerian DFI to bring to fruition their developmental objectives of creating jobs and enabling growth and sustainability for businesses in different sectors of Nigeria’s economy. International issuance by West African clients has continued to grow, and RMB is proud to have had the opportunity to assist an indigenous entity access capital for growth, globally”.

The DCM Transactor at RMB, Suliyat Adeleke, also stated: “As a DCM banker pursuing opportunities in Nigeria for a number of years, the transaction’s success is very fulfilling. Being Nigerian-British, I am ecstatic at the opportunity to be of service to one of my countries.

“As a member of the Nigerian female youth in diaspora, I am excited about this transaction and feel personally vested in BOI’s success – as empowerment of Nigerian Youths and Women is a core part of BOI’s developmental mandate. I am also proud of BOI’s efforts and wish the institution success in achieving its vision.”

As of November 2021, BOI had total assets of US$4.3billion and had a 60+ year developmental track record. The Institution supports projects with potential developmental impact and has supported three million enterprises and created seven million jobs since 2015. The bank has also focused on emerging sectors that are typically underserved by other financial institutions: such as the youth segment, female-owned businesses, renewable energy and the entertainment industry.

Olukayode Pitan, Managing Director and Chief Executive at BOI, said the issuance is aligned with Agenda 2050 and Nigeria’s National Development Plan 2025: “BOI has been in operation for over 60 years with a significant understanding of the Nigerian banking sector. Our developmental mandate is guided by the National Development Plan 2025, and the primary drivers of our strategy include providing lower interest rates, job/value creation, women & youth empowerment and sustainability, to name a few”.

Commenting on the issue, Dominic Adu-CEO of First National Bank Ghana, expressed his excitement about the issue. “The appointment of RMB to act as coordinators and book runners to run the first issue for Nigeria, and arguably one of the biggest in Africa, testifies to the confidence in our footprint of corporate business diversification and capabilities to meet the ongoing demand for quality corporate paper in the global capital market. It is evident that our consistent profitability and sound management are recognised,” he said.