Seplat issues largest ever Nigerian oil, gas bond worth $650m

Seplat Petroleum Development Company plc, a leading Nigerian independent energy company, listed on both the Nigerian and London Stock Exchanges, has priced its offering of $650 million in aggregate principal amount of senior notes due 2026 (the “Notes”).

The Notes priced at a yield of 7.75 percent, represent a significant pricing reduction from its $350 million debut issuance in 2018, which priced at a yield of 9.50 percent, with a coupon of 9.25 percent.

The size represents the largest ever Nigerian oil and gas bond issuance. The offering was well oversubscribed with demand from 120 global investors from more than 20 countries resulting in a final overbook in excess of $1.1 billion, which was 1.7 times book coverage.

The global coordinators on the transaction are Citi, J.P. Morgan, Standard Bank and Standard Chartered Bank, with Natixis, Rand Merchant Bank and Société Générale acting as Joint Bookrunners and FCMB Capital Markets, Nedbank, United Bank for Africa and Zenith Bank plc acting as co-managers.

Orders came from high quality institutional investors with long-term commitments to Seplat as well as new institutional investors. The transaction was well received in the market and traded above par post-pricing.

The transaction shows confidence by the international market in the Nigerian economy and the oil and gas sector in particular, with a number of the investors committing to the transaction based on the strong gas story of Seplat.

The bond proceed will be used to redeem the existing Seplat 2023 notes, repay drawings under the Revolving Credit Facility, for general corporate purposes, and pay transaction fees and expenses.

Seplat had notified investors of the conditional redemption of its $350 million aggregate principal amount of 9¼ percent Senior Notes due 2023. The issuer has elected to redeem the entire outstanding principal amount of the Notes outstanding on April 1, 2021.

The leading independent indigenous upstream oil and gas company operating in Nigeria is rated B2 by Moody’s, B by S&P and B- by Fitch

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with over 18 years journalism experience writing on banking, finance and capital markets. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA).

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