FMDQ in the News

FMDQ Set to Admit Inaugural Listing of FGN Eurobonds Posted on: February 15, 2017

FMDQ Set to Admit Inaugural Listing of FGN Eurobonds. In consolidation of the strategic and value-adding initiatives spearheaded by FMDQ OTC Securities Exchange (“FMDQ” or “the OTC Exchange”) in developing the Nigerian financial markets, the OTC Exchange, in an unprecedented event in the history of the Nigerian debt capital market (DCM), is set to admit the pioneer listing of the $1.00bn Federal Government of Nigeria (FGN) Eurobond to its platform. The FGN, on Feb. 9, 2017, announced the pricing of its offering of $1.00bn Notes (Eurobond) under its $1.00bn Global Medium-Term Note Programme. Following a series of engagements by FMDQ on the importance of promoting and supporting economic development in the country through the opening of Eurobonds to the domestic DCM via the OTC Exchange’s platform, this welcome and laudable development, which market participants believe will set the pace for global competitiveness and invariably deepen the Nigerian financial markets, in no small measure, lays credence to the underlying objectives for the birth and operational mandate of FMDQ.

The issuance of the $1.00bn FGN Eurobond is aimed at fostering economic development and will serve to rejuvenate the vibrancy of the nation’s FX market. Remarkably so, this is the first-time the sovereign’s Eurobond will be considered for listing on a domestic exchange, following the nation’s first and second outings to the international capital markets in 2011 and 2013 respectively. This most commendable consideration follows the decision of the Debt Management Office (DMO), Nigeria, (the authority under which the FGN issues Bonds and Treasury Bills) and the Ministry of Finance to list the Eurobond on an efficient domestic securities exchange such as FMDQ to deepen and support the development of the local DCM.

In streamlining its processes and ensuring an efficient time to market for debt securities, FMDQ, being Nigeria’s foremost debt capital-focused OTC securities exchange has continued to provide a highly resourceful platform for the registration, listing of Bonds (Sovereign, Agency, Sub-national, Corporate, Supranational, as well as Eurobonds and Sukuk), Funds and the quotation of Commercial Papers, Treasury Bills and other short-term securities as may arise from time to time, to meet the needs of the market participants. Whilst currently providing improved transparency, effective price formation and enhanced secondary market liquidity through its Dealing Members, who are responsible for circa 99.00% of the secondary market trading activity in FGN Bonds and Nigerian Treasury Bills on FMDQ, the OTC Exchange, in admitting the $1.00bn Eurobond for listing and trading, will continue to lend itself as a worthy and operationally excellent platform, serving as the point of integration between the domestic and international markets. The OTC Exchange, since its debut into the Nigerian financial market landscape, already granted permitted trading status for $1.50bn of the previously issued FGN Eurobonds and $3.15bn of Eurobonds issued by Nigerian companies.

With its audacious vision to be No. 1 in the fixed income and currencies markets in Africa by 2019, the listing and eventual trading of the FGN Eurobonds on FMDQ, the first of its kind in the nation, will see the securities gain access to the full complement of the FMDQ Listings and Quotations service, which includes efficient clearing and settlement structures, unprecedented transparency, and improved network effects, among others. FMDQ, in its capacity as a market organiser and information repository provides credible market infrastructures to aggregate and transmit all trade reports from its Dealing Members acting as liquidity providers to the Eurobonds, ensuring continuous information symmetry. In appreciation of the important role which a transparent and regulated market plays in boosting investor confidence, the OTC Exchange will also publish relevant market data and information as necessary.

FMDQ, through effective collaboration, continues to garner the support of its varied stakeholders and has remained committed to transforming and positioning the Nigerian financial markets towards becoming a regional financial centre. From the introduction of short-term and private companies’ bonds, the standardisation of the repurchase agreements with collateral management trading, to financial markets education, and most recently, the strategic partnership with S&P Dow Jones Indices for the co-branding of Nigerian fixed income indices, FMDQ, in 2017, will, despite the economic headwinds, relentlessly champion initiatives, aimed at empowering the global competitiveness of the Nigerian debt capital, currencies and OTC derivatives markets, towards promoting sustainable development for corporate and commercial entities, and ultimately, the nation’s economy.

 
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