Nigeria has been honoured with the 2013 EMEA Best Sovereign Bond in Africa Award for the country’s landmark Eurobillion bond which was oversubscribed four times by investors. The plaque for the coveted award by Citigroup was yesterday presented to the Coordinating Minister for the Economy and Minster of Finance, Dr. Ngozi Okonjo-Iweala, by Chief Executive Officer (CEO), Citigroup, Europe, the Middle East and Africa (EMEA), Mr. Jim Cowles.

The $1 billion bond was obtained at very favourable coupon rates compared to what other countries got, making good savings for the country. The bond which was issued by the country in July 2013 is being deployed mainly for financing of various power infrastructure projects in order to improve power supply to industries, business and homes. The allocation profile for the proceeds of the bond shows that 90% will go to power infrastructure while the balance goes to aviation.

Analysts say the award also underscores the fact that the Nigeria team led by Okonjo-Iweala and which included the Director-General of the Debt Management Office, Dr. Abraham Nwankwo, showed good judgement in the timing of the bond and negotiated very good terms for the country. The enthusiastic reception to the bond was all the more remarkable because it was issued during a period of market turbulence.

Speaking yesterday while receiving the award in Abuja on behalf of the Federal Government at the Conference Room of the Federal Ministry of Finance, Okonjo-Iwaeala said it demonstrates that Jonathan administration’s strategy of leveraging on the strengths of the economy to boost key sectors like power is working. “The focus of the Jonathan administration is on transforming key sector through innovative management of the economy. This award shows that we are on the right track,” she said.

Explaining the rationale for the issuing of the bond, the minister said: “One of the goals of public debt management is to diversify the sources of borrowing while also subjecting the government to the discipline of the domestic and international financial markets in order to create a sovereign presence and benchmarks in these markets, which Nigerian corporates can leverage upon access long term capital.”

She said the main objective of the 2013 bond was to build on this successful debt strategy and in order to reduce the government’s borrowing in the domestic market and reduce debt service costs.

News Express reports that the Federal Government’s decision to float the award-winning bond was inspired by the success of earlier bonds. Nigeria made a debut entry into the international Capital Market (ICM) in January 2011 through the issuance of a USD500 million 10-year Eurobond.

Despite the extreme volatility of markets across the globe due to pronouncements by the United State Federal Reserve Bank of a reduction of its Quantitative Easing programme, the $1 billion bond, which was aggressively promoted through international road shows, turned out to be a huge success. On July 2, 2013 Nigeria beat the odds by successfully pricing two Eurobonds in tenors of 5 and 10 years, each for USD500 million. The total subscription was USD3,995 million (4 times the amount of Offer) and Coupons of 5.125% and 6.375% for the 5-year and 10 year Bond respectively.

•Photo shows Okonjo-Iweala posing with the award in a group photograph . . . yesterday in Abuja.