The Bank of Industry (BOI) has secured more than the N250 billion it offered in its first domestic bond issuance, giving the development finance institution a major boost in its efforts to mobilise long-term funding for Nigerian businesses.
Issued through BOI Financing SPV Plc under the bank’s $1 billion Multi-Currency Instruments Programme, the Series 1 Fixed Rate Bond marks BOI’s debut in Nigeria’s domestic debt capital market. The strong response came from a broad mix of institutional investors, including pension fund administrators, commercial banks, development finance institutions, corporates and other major market participants.
The transaction also attracted significant anchor investments from the Nigeria Sovereign Investment Authority (NSIA) and the International Finance Corporation (IFC), adding further depth to the offering and reinforcing confidence in BOI’s credit standing and development mandate.
The capital raised is intended to strengthen BOI’s capacity to provide long-term financing to businesses in priority sectors. Its eventual impact is expected to extend into industrial expansion, job creation, local value addition and efforts to diversify Nigeria’s economy.
BOI Managing Director and Chief Executive Officer, Dr. Olasupo Olusi, said the response showed the capacity of Nigeria’s domestic capital market to mobilise substantial funding for productive investment.
“The strength of the investor response is a vote of confidence not only in BOI, but also in the capacity of Nigeria’s domestic capital market to mobilise long-term capital for productive investment,” he said.
Olusi said the bank’s objective is ultimately to move the capital into Nigerian enterprises that can expand production, strengthen local value chains, create employment and improve economic competitiveness.
Government-backed incentives also formed part of the environment surrounding the transaction. Olusi credited President Bola Tinubu’s executive approvals for measures designed to encourage investor participation, saying the support helped strengthen the attractiveness of the offering.
He said the strong demand achieved within five working days would not have been possible without the approvals and described the intervention as a positive signal to investors.
A separate N100 billion fund approved for BOI is expected to support the bond’s pricing and reduce the borrowing-cost burden for manufacturers and other businesses that receive financing from the bank.
The structure of the bond reflects BOI’s focus on longer-term lending. The five-year instrument provides semi-annual coupon payments and a two-year moratorium on principal repayment before amortising repayments begin.
Subscriptions ran from August 5 to August 11, with Chapel Hill Denham serving as Lead Issuing House. The bond was priced within a yield range of 17.35% to 17.50% and is expected to be listed on the FMDQ Securities Exchange once the issuance process is completed.
BOI said the final subscription and allotment figures will be released after obtaining approval from the Securities and Exchange Commission (SEC).
The domestic transaction adds another layer to BOI’s funding strategy, complementing the institution’s access to international capital markets with a stronger pipeline of domestic institutional funding. The quality of demand, competitive pricing and range of participating investors point to an established appetite for long-term instruments backed by institutions with strong development mandates.
The bond also comes as BOI expands financing for specific productive sectors through international partnerships. Last month, the bank unveiled an €85 million long-term financing facility with the European Investment Bank (EIB) and the European Union to support cocoa processing and dairy production in Nigeria.
About 70% of that facility is expected to go towards the cocoa and dairy value chains, which are regarded as important to employment, export growth and foreign-exchange retention.
Taken together, the financing initiatives give BOI additional resources to connect long-term capital with businesses capable of expanding production and increasing value creation within Nigeria.
The success of the N250 billion bond therefore strengthens the pool of capital available to Nigerian enterprises seeking to invest, expand capacity and contribute to the country’s industrial development.
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