BOI raises N250bn as investors oversubscribe maiden domestic bond

THE Bank of Industry Limited (BOI) has successfully raised N250 billion through its first local currency bond issuance after strong demand from institutional investors pushed the offer into oversubscription.

The Series 1 Fixed Rate Bond was issued by BOI Financing SPV Plc under the bank’s $1 billion Multi-Currency Instruments Programme.

The offering attracted pension fund administrators, commercial banks, development finance institutions, corporates and other institutional investors, highlighting significant demand for long-term domestic investment instruments.

The participation of major institutional investors, including the Nigeria Sovereign Investment Authority and the International Finance Corporation, further strengthened the transaction.

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For BOI, the successful issuance represents a diversification of its funding sources, giving the development finance institution greater access to long-term naira funding from the domestic capital market alongside its international financing activities.

BOI’s Managing Director and Chief Executive Officer, Mr Olasupo Olusi, said the investor response demonstrated confidence in the bank and Nigeria’s ability to mobilise domestic savings for productive investment.

He said the funds would be deployed to expand financing for Nigerian businesses, industrial projects and other productive activities, with expected benefits for job creation, local value chains and economic diversification.

Olusi also attributed the strong demand partly to support from President Bola Ahmed Tinubu and incentives approved by the Federal Government to encourage participation in the bond.

He said the president’s executive approval of the incentives helped create a positive signal for investors and contributed to the strong demand recorded within 5 working days.

“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,” Olusi said.

He added that a N100 billion fund approved for BOI by the president would be used to support the pricing of the bond and mitigate the effect of high interest rates on manufacturers and other BOI customers.

According to Olusi, the measure further demonstrates the administration’s support for Nigeria’s productive sector.

The bond also marks a significant development in BOI’s funding strategy, as the bank seeks to deepen its relationship with Nigerian institutional investors and unlock more long-term domestic capital.

BOI’s mandate is to provide long-term financing to businesses seeking to establish, expand, modernise, rehabilitate or diversify their operations.

The bank said proceeds from the transaction would strengthen its ability to finance eligible enterprises in priority sectors, with the potential to increase productive capacity, promote local value addition, create jobs and support economic diversification.

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BOI said detailed subscription figures and final allotment information would not be released until the relevant regulatory approvals had been obtained.

The oversubscription of the bond nevertheless signals strong institutional appetite for BOI debt and long-term naira-denominated assets.

It also underscores the growing role of Nigeria’s domestic capital market in converting institutional savings into long-term financing for businesses and productive investment.