Seplat Petroleum issues US$650m 5-year oil and gas bond, the largest in Nigeria

NIGERIA – Seplat Petroleum Development Company Plc, a leading Nigerian independent energy Company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has priced its offering of US$650 million in aggregate principal amount of senior notes due 2026.

It is said to be the largest ever Nigerian oil and gas bond issuance.

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

The offering was well oversubscribed with demand from 120 global investors from more than 20 countries resulting in a final overbook in excess of US$1.1 billion, which was 1.7 times book coverage.

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 Global Coordinators on the transaction are Citi, J.P. Morgan, Standard Bank and Standard Chartered Bank, with Natixis, Rand Merchant Bank and Societe Generale acting as Joint Bookrunners and FCMB Capital Markets, Nedbank, United Bank for Africa and Zenith Bank Plc acting as Co-Managers.

A senior note is a type of bond that must be repaid before most other debts in the event that the issuer declares bankruptcy. It is more secure than other bonds.

The dual listed company said the five-year bond was well-received in the market with orders from high quality institutional investors.

In April 2014, Seplat completed the first ever dual listing on both the London Stock Exchange and the Nigerian Stock Exchange, making it the only one listed in the two stock exchanges.

Seplat raised US$535 million in an initial public offering that ranked as the largest for a sub-Saharan Africa company since 2008 and the second largest ever for a Nigerian company, demonstrating the international investor appetite for leading Nigerian indigenous players in the oil and gas sector.

The capital raised allowed Seplat to further implement the Company’s business strategy, including the acquisition of additional blocks.

Seplat is a leading independent oil and natural gas producer in the prolific Niger Delta area of Nigeria.

The Company’s focus is on maximising hydrocarbon production and recovery from its existing assets, acquiring and farming into new opportunities in Nigeria (specifically those which offer production, cash flow and reserve replacement potential, with a particular focus on the onshore and shallow water offshore areas) and realising the upside potential within its portfolio through exploration and appraisal activities.

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