Report: BNY Mellon, Standard Bank To Facilitate Access To Nigerian Naira Debt

• Bank of New York Mellon Corp. and Standard Bank Group Ltd. are introducing Global Depositary Notes (GDNs) backed by Nigerian sovereign debt in naira
• This initiative will allow global institutional investors to settle transactions through Euroclear and Clearstream, making participation more accessible
• Nigeria’s benchmark bond yields, one of the highest in emerging markets, further attract foreign investment, supporting the growth of capital markets across Africa

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Global depositary notes backed by Nigerian sovereign debt denominated in naira are being introduced by Bank of New York Mellon Corp. and Standard Bank Group Ltd., Bloomberg report on Wednesday, June 18th.

Nigeria is Africa's most populous country, and the plan is said to be intended to provide foreign investors with easy access to the high yields here.

Global institutional investors will be able to participate more widely since the depositary notes will be able to be settled through Euroclear and Clearstream, two significant international clearing systems.

In attempts to increase international access to Nigeria's domestic debt market, the development is regarded as a major turning point.

Nigeria auctioned 182-day Treasury bills on June 4 at a yield of 18.5%, while as of Wednesday, its benchmark bond for 2033 was trading at 19.33%, one of the highest yields in emerging markets, according to Bloomberg report.

According to Chris Kearns, global head of depositary receipts at BNY Mellon, the initiative is anticipated to assist unlock investment potential throughout Africa and support the growth of the continent's capital markets.

FG opens N350bn bond auction, invites Nigerians to invest

Legit.ng reported that the Debt Management Office (DMO) has announced plans to reopen two federal government bonds for auction, with a total value of N350 billion. The bonds will be available for subscriptions at N1,000 per unit.

These bonds are designed for retail investors, offering guaranteed quarterly interest payments and the return of the principal at maturity.

By purchasing an FGN Bond, you are essentially lending money to the government for a set period. The government is committed to repaying the principal amount along with the agreed interest at the appropriate times.

These bonds are considered the safest investment option in the local debt market because they are fully backed by the Federal Government’s guarantee, making them a risk-free investment.

There is no risk of default, ensuring that both your interest and principal will be paid on schedule. Additionally, the interest earned from these bonds is exempt from tax.

FG invites Nigerians to invest in savings bonds

Legit.ng reported that the Debt Management Office (DMO) has unveiled a new opportunity for subscription to two Federal Government of Nigeria (FGN) savings bonds, priced at N1,000 per unit.

The DMO disclosed this in a statement released on Monday, August 7, 2024, in Abuja.

These savings bonds are designed specifically for retail investors, ensuring a quarterly interest payout and full repayment of the principal upon maturity.

Source: Legit.ng