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FG to Borrow Another N250 Billion to Finance Critical Road Projects

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Sovereign Sukuk

The Federal Government through its agency, Debt Management Office (DMO), a government agency established to centrally coordinate the management of Nigeria’s debt, is set to issue another Sovereign Sukuk this year for N200 to N250 billion to finance critical road projects across Nigeria.

DMO disclosed in a statement released on its website and obtained by Investors King on Tuesday.

DMO issued the first Sukuk in September 2017 to support the development of infrastructure, promote financial inclusion and deepen the domestic securities market. The agency raised N100 billion to finance the rehabilitation and construction of twenty-five (25) road projects across the six (6) geopolitical zones.

In 2018, the DMO raised another N100 billion and N162.557 billion in 2020 through Sovereign Sukuk issuances. The funds from the two issurances were used to finance twenty-eight (28) and forty-four (44) road projects in the six (6) geopolitical zones. 

In summary, a total of N362.577 billion Sovereign Sukuk was issued between September 2017 and June 2021.

According to the DMO, “The use of Sukuk, has enabled timely completion of the designated projects whilst also delivering the multiplier effects associated with construction of capital projects such as roads.”

The DMO appointed Transaction Parties through the Open Competitive Bidding Process for the issuance of its fourth Sovereign Sukuk. The Transaction Parties and their respective roles are stated below:

a. Issuing Houses     –      Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited

                                            and Vetiva Capital Management Limited.

b. Financial Adviser –       BURAQ Capital Limited.

c. Trustees       –             FBNQuest Trustees Limited and APEL Capital & Trust Limited

d. Legal Advisers       –     Abdulai, Taiwo & Co. Solicitors and Tsedaqah Attorneys

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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African ESG Bond Issuance Surges to $4.4bn in 2024

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Bonds- Investors King

The landscape of sustainable investment in Africa is experiencing a significant upswing as the issuance of Environmental, Social, and Governance (ESG) bonds by African entities hit $4.4 billion in 2024.

This substantial increase highlights a growing commitment among African institutions to raise funds for investments aligned with ESG principles.

The surge in ESG bond issuance underscores a broader trend towards responsible and sustainable investing on the continent.

The African Development Bank (AfDB) emerges as a key player in this segment, having successfully issued social bonds worth $2 billion in January 2024, in addition to hybrid sustainable bonds amounting to $750 million.

Joining the AfDB in this endeavor is the Arab Bank for Economic Development in Africa (BADEA), which, with the support of the African Export-Import Bank, has issued bonds totaling €500 million.

This momentum in the ESG bond market has propelled financial institutions like BNP Paribas, JPMorgan, and Bank of America Securities into leading positions as arrangers for such bonds on the continent.

The surge in ESG bond issuance reflects a broader global trend towards sustainable finance, with the total value of emissions of this kind expected to reach $950 billion in 2024, according to Moody’s.

It is evident that ESG bonds are gaining traction in Africa, supported by development finance institutions and initiatives aimed at fostering sustainable economic growth and development across the continent.

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Coinbase Unveils $1 Billion Convertible Bond Plan to Fuel Growth

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Coinbase - Investors King

Coinbase Global, Inc., the renowned cryptocurrency exchange platform, has announced its strategic move to bolster its financial position by initiating a private sale of $1 billion in convertible senior notes.

The bonds, set to mature in 2030, come with an additional provision allowing initial buyers to acquire an extra $150 million to address potential over-allotments.

This ambitious plan, aimed at fortifying Coinbase’s financial foundation, underscores the company’s commitment to fostering growth and expansion in the ever-evolving cryptocurrency landscape.

The proceeds from the convertible bond issuance are earmarked for “working capital and capital expenditures,” reflecting Coinbase’s strategic vision to drive innovation and enhance its market presence.

Convertible bonds offer a unique avenue for Coinbase to raise capital, providing investors with the flexibility to convert their holdings into company stock.

This approach not only diversifies Coinbase’s funding sources but also potentially reduces interest costs compared to traditional debt financing methods.

The decision to opt for convertible bonds aligns with Coinbase’s strategy to navigate market dynamics effectively while maximizing shareholder value.

Amidst recent operational challenges, including glitches during bitcoin’s price surges, Coinbase remains steadfast in its pursuit of growth opportunities.

Coinbase’s move to secure $1 billion through convertible bonds underscores its confidence in the long-term prospects of the cryptocurrency industry.

As the company continues to innovate and adapt to market trends, investors are poised to witness Coinbase’s strategic vision translate into sustained growth and value creation in the dynamic world of digital assets.

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Nigeria Taps Citibank, JPMorgan, Goldman Sachs for Eurobond Issue

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Bonds- Investors King

Nigeria has taken a significant step towards its first eurobond issue since 2022 by enlisting the expertise of top-tier investment banks, including Citibank NA, JPMorgan Chase & Co., and Goldman Sachs Group Inc.

Sources familiar with the matter disclosed that the eurobond offer, anticipated before June, is yet to have its size determined.

The decision to tap into international debt markets underscores Nigeria’s quest to secure external funding to meet its expenditure requirements amidst fiscal needs.

With Africa’s largest oil producer potentially eyeing up to $1 billion in external borrowing this year, the move aligns with President Bola Tinubu’s approved spending plan of 28.8 trillion naira ($18 billion) for 2024.

Amidst Nigeria’s ambitious fiscal targets, including a budget deficit of 9.8 trillion naira, equivalent to 3.8% of gross domestic product (GDP), external borrowings remain a vital component for financing infrastructure projects and stimulating economic growth.

The engagement of renowned investment banks reflects Nigeria’s efforts to instill confidence among foreign investors and attract capital inflows.

Since assuming office in May, President Bola Tinubu has spearheaded a series of reforms aimed at revitalizing the economy, including currency devaluation and subsidy removals.

In addition to Citibank, JPMorgan, and Goldman Sachs, Standard Chartered Bank and Lagos-based Chapel Hill Denham have been engaged as advisers by the Nigerian government.

This strategic move signals Nigeria’s determination to leverage global financial expertise in navigating its fiscal landscape and tapping into international capital markets to bolster economic development.

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