Bank of New York Mellon Corp. (BNY Mellon), alongside Standard Bank Group Ltd., has launched global depositary notes backed by Nigerian sovereign debt denominated in naira.
In a statement by the Central Bank of Nigeria (CBN) on Thursday, the initiative was reported by Bloomberg the previous day.
It noted that the initiative aims to give international investors streamlined access to Nigeria’s high-yielding debt market.
The new depositary notes will be eligible for settlement through major international clearing systems, Euroclear and Clearstream, allowing broader participation from global institutional investors.
This development is seen as a significant step in deepening foreign access to Nigeria’s local debt market and further integrating it into the global financial system.
The statement read, “The initiative is designed to give international investors streamlined access to the elevated yields available in Nigeria, Africa’s most populous nation.
“The depositary notes will be eligible for settlement through major international clearing systems, Euroclear and Clearstream, enabling broader participation from global institutional investors. This development represents a significant milestone in efforts to deepen foreign access to Nigeria’s local debt market.”
Nigeria’s sovereign debt is among the highest returns in emerging markets
- It was also noted that Nigeria’s sovereign debt offers some of the highest yields in emerging markets. The country recently sold 182-day Treasury bills on June 4 at a yield of 18.5%. Also, its 2033 benchmark bond was trading at a yield of 19.33% as of Wednesday, further solidifying its position as a high-return destination for investors.
- According to Chris Kearns, the global head of depositary receipts at BNY Mellon, the program is expected to unlock investment potential across Africa and contribute to the development of capital markets on the continent.
What you should know
In an earlier statement by the Bank of New York Mellon Corp, it was noted that the Global Depositary Notes (GDN) program will simplify access for global investors to high-yield, local-currency Nigerian government bonds and Treasury bills (T-Bills).
It noted that the program combines Standard Bank’s strong local presence with BNY Mellon’s global cross-border investment infrastructure to offer Nigerian debt securities, denominated in naira (NGN), through GDNs.
The BNY Mellon statement added, “The GDNs will be issued in two series per Nigerian bond: Reg S and 144A and will be eligible for settlement in Euroclear and Clearstream.”
In the statement, Sola Adegbesan from Standard Bank added that the GDN program represents a unique opportunity for investors to access one of Africa’s most dynamic economies, offering a simplified entry point into Nigeria’s debt market.
