Bank of New York Mellon and South Africa’s Standard Bank are teaming up to make it easier for international investors to invest in Nigerian government debt, Bloomberg reported on Wednesday.
They are launching a new investment product called global depositary notes, which will be backed by Nigeria’s naira-denominated government debt. The goal is to give foreign investors simpler access to the high returns currently available in Nigeria’s bond market.
These notes will be cleared through major international systems like Euroclear and Clearstream, making them more attractive to big investors around the world. This move is seen as an important step toward opening up Nigeria’s local debt market to more foreign capital.
Bloomberg noted that Nigeria recently sold six-month Treasury bills at an interest rate of 18.5%, while its 10-year government bonds are offering yields of about 19.33% — some of the highest returns among emerging markets.
Chris Kearns, BNY Mellon’s global head of depositary receipts, said the initiative could unlock more investment across Africa and help develop capital markets on the continent.
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