The Bank of Industry Limited (BOI) has attributed the oversubscription of its N250bn Series 1 Fixed Rate Bond to investor incentives approved by President Bola Tinubu.
The bond, issued through BOI Financing SPV Plc under the bank’s $1bn multi-currency instruments programme, was oversubscribed within five working days.
BOI’s Chief Executive Officer, Olasupo Olusi, said the investor response shows confidence in the bank and Nigeria’s domestic capital market.
“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 would not have received the level of investor demand within five working days without the incentives approved by Tinubu.
“As a Development Finance Institution, we could not have received the strong investor demand for the bond in five working days without the support of President Tinubu, who gave his executive approval for various incentives to encourage investors.
“This became a leverage and a positive signal to discerning investors. Mr President deserves the honour for this feat. This is further testament to Mr President’s support for Nigeria’s productive sector,” he said.
According to Olusi, the transaction was intended to convert investor confidence into increased financing for Nigerian businesses.
The proceeds, he added, will support industrial expansion, job creation, local value addition and economic diversification.
Olusi also said the N100bn fund approved for BOI by Tinubu would be used to blend the bond’s pricing and cushion the impact of high interest rates on manufacturers and other BOI customers.
“This is further testament to Mr President’s support for Nigeria’s productive sector,” Olusi said.
BOI said the transaction also showed the capacity of Nigeria’s domestic capital market to channel long-term institutional savings into productive sectors.
However, the bank said final subscription and allotment figures would not be disclosed at this stage because the allotment remains subject to approval by the Securities and Exchange Commission, while the transaction is still being completed.
According to the bank, the immediate significance of the transaction lies in the strength and quality of investor demand, the pricing achieved and the breadth of the investor base.
It further said that proceeds from the issuance would increase its capacity to provide long-term financing to eligible businesses in priority sectors, and support investment in productive capacity, local value addition, employment and economic diversification.
(The Whistler)
