Nigeria closes $550M power bond, led by CardinalStone

What's the deal? The Federal Government of NigeriaDealroom has a profile for this one. Try Dealroom → has closed a N728.97 billion (roughly $550 million) Series 2 Power Sector Bond, with CardinalStone PartnersDealroom has a profile for this one. Try Dealroom → serving as lead financial adviser and lead issuing house. The seven-year instrument was issued through a special purpose vehicle and fully guaranteed by the federal government.

How it broke down: The transaction combined an oversubscribed N402 billion issue to domestic investors — banks, pension funds, the Sovereign Wealth Fund, asset managers, high-net-worth individuals, and retail buyers — with N326.97 billion issued to participating Power Generation Companies. The amortising bond cleared at 18.0%.

Why now? The bond is part of Nigeria's effort to clear verified legacy debts in the power sector and improve liquidity across the electricity value chain. With this series closed, the programme's first phase has reached N1.23 trillion.

What's the endgame? Proceeds are expected to settle obligations to generation companies and their suppliers, adding financial stability across the power and gas value chains.

What they said: "The strong investor response is a testament to the strength of the transaction and the confidence of the market in its underlying objectives," said Michael Nzewi, group managing director of CardinalStone Partners.

The signal: At about $550 million, this ranks among the largest debt raises tracked in Nigeria — above the 93rd percentile of 184 such deals. The oversubscribed investor tranche points to growing capacity in the country's domestic capital market to fund long-term needs in critical sectors.

Read more: nairametrics.com

Image credit: Generated with Gemini