BOI’s N250bn Debut Bond Records Oversubscription

The Bank of Industry (BOI) has successfully entered Nigeria’s domestic bond market, as its first-ever N250 billion bond received subscriptions exceeding the amount on offer.

The bond, issued through BOI Financing SPV Plc under the bank’s $1 billion Multi-Currency Instruments Programme, attracted strong interest from institutional investors including pension fund administrators, commercial banks, development finance institutions and corporates.

The Nigeria Sovereign Investment Authority (NSIA) and the International Finance Corporation (IFC) also came in as major anchor investors, a development the bank said strengthened confidence in its credit standing.

BOI said proceeds from the bond would be used to expand its long-term financing for businesses in priority sectors to support industrial growth, job creation and economic diversification.

Speaking on the outcome, BOI’s managing director and chief executive officer, Dr Olasupo Olusi, said the oversubscription showed that Nigeria’s domestic market could support large-scale development financing. He described the investor response as “a vote of confidence not only in BOI, but also in the capacity of Nigeria’s domestic capital market.”

According to Olusi, the goal of the bond issuance is to channel capital into Nigerian businesses in ways that would boost industrial expansion, strengthen local value chains and create jobs.

He also credited President Bola Tinubu’s policy support for the strong investor turnout, explaining that executive approvals granted to encourage investors helped the bond succeed within just five working days of opening. He further revealed that a N100 billion fund approved by the President would help support the bond’s pricing and reduce borrowing costs for manufacturers and other BOI beneficiaries.

BOI said the bond issuance broadens its funding sources by combining access to international capital markets with more domestic institutional investment. The bank noted that final subscription and allotment figures would be released once it obtains approval from the Securities and Exchange Commission (SEC).

The bond opened for subscription on August 5 and closed on August 11. It was arranged by Chapel Hill Denham as lead issuing house, and priced within a yield range of 17.35 per cent to 17.50 percent. It is a five-year bond with semi-annual coupon payments and a two-year moratorium on principal repayment. The bond is expected to be listed on the FMDQ Securities Exchange once the issuance process is completed.