BoI Raises N250bn Development Bond as Institutional Demand Surges

ABUJA — The Bank of Industry (BoI) has secured strong institutional demand for its maiden N250 billion Series 1 Fixed Rate Bond, with the offer oversubscribed within five working days, highlighting growing appetite for long-term development assets in Nigeria’s domestic capital market.

The bond was issued through BoI Financing SPV Plc under the bank’s $1 billion Multi-Currency Instruments Programme, attracting investment from Pension Fund Administrators (PFAs), commercial banks, development finance institutions, corporates and other institutional investors.

The transaction also received anchor support from the Nigeria Sovereign Investment Authority (NSIA) and the International Finance Corporation (IFC), reinforcing investor confidence in BoI’s credit profile and its role as a development-finance institution.

BoI said the final subscription and allotment figures would be released after the transaction receives the necessary approval from the Securities and Exchange Commission (SEC).

Tinubu-backed incentives boost investor appetite

BoI Managing Director and Chief Executive Officer, Olasupo Olusi, said the strong demand demonstrated the ability of Nigeria’s domestic capital market to mobilise substantial long-term funding for productive investment.

Olusi attributed part of the investor response to measures approved by President Bola Ahmed Tinubu to encourage participation in the bond.

“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,” Olusi said.

He said the transaction would not have attracted such strong demand within five working days without the incentives approved by the President.

According to Olusi, the government-backed incentives provided additional comfort to institutional investors and helped strengthen the attractiveness of the instrument.

N100bn fund to support manufacturers

Olusi also disclosed that a N100 billion fund approved for BoI by the Federal Government would be deployed to support the pricing of the bond and mitigate the impact of elevated interest rates on manufacturers and other BoI customers.

“This is further testament of Mr. President’s support for Nigeria’s productive sector,” he said.

The intervention is particularly significant for manufacturers and other businesses facing elevated borrowing costs as Nigeria seeks to expand domestic production, strengthen local value chains and reduce dependence on imports.

BoI to expand long-term business financing

The bank said proceeds from the bond would increase its capacity to provide long-term financing to eligible businesses across priority sectors of the Nigerian economy.

The funding will focus on projects that expand productive capacity, increase local value addition, create employment and support economic diversification.

BoI said the transaction would complement its existing international funding channels by deepening its access to domestic institutional capital.

The development finance institution has previously established a presence in international capital markets, but the latest transaction marks a significant expansion of its domestic funding strategy.

PFAs, banks and DFIs drive demand

The broad investor participation is also significant for Nigeria’s capital market, where institutional investors such as pension funds control substantial pools of long-term savings.

BoI said participation by PFAs, banks, DFIs, corporates and other institutional investors demonstrated sustained appetite for high-quality, long-duration naira assets.

The participation of NSIA and IFC as anchor investors further strengthened the institutional profile of the transaction, according to the bank.

For investors, development bonds issued by institutions with established lending mandates can provide exposure to long-term domestic assets while supporting projects in manufacturing, infrastructure and other productive sectors.

A boost for Nigeria’s development-finance market

BoI said the successful bond issue should be viewed beyond the immediate N250 billion fundraising, arguing that it demonstrates the capacity of Nigeria’s domestic capital market to channel institutional savings into productive economic activity.

The transaction also broadens BoI’s funding architecture and strengthens its position as a repeat issuer in the domestic capital market.

Olusi said the ultimate objective was to convert investor confidence into increased financing for Nigerian businesses.

He said the additional funding could support industrial expansion, job creation, domestic value-chain development and improved economic competitiveness.

The bank’s broader mandate remains focused on industrial development, import substitution, poverty reduction, employment generation and economic diversification.

For Nigeria, the successful bond sale comes as policymakers seek to deepen domestic sources of long-term capital and reduce the financing constraints facing businesses, particularly manufacturers and other capital-intensive sectors.

The transaction therefore provides an important test of whether domestic institutional savings can increasingly be deployed to finance Nigeria’s productive economy rather than short-term government and financial-market instruments.