Seplat Petroleum Development Company Plc has priced its offering of $650 million in aggregate principal amount of senior notes due 2026.
The size represents the largest ever Nigerian oil and gas bond issuance.
The notes, priced at a yield of 7.75 per cent, represent a significant pricing reduction from its $350m debut issuance in 2018, which priced at a yield of 9.50 per cent, with a coupon of 9.25per cent.
The offering was 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 proceeds 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 $350m aggregate principal amount of 9¼ per cent senior notes due 2023. The issuer has elected to redeem the entire outstanding principal amount of the notes outstanding on April 1, 2021.
