Private equity-backed Viathan issues Nigeria's debut 10-year guaranteed naira bond
Private equity-backed Viathan Group has issued Nigeria’s debut 10-year corporate infrastructure bond in local currency to raise 10 billion naira ($32 million) at a yield of 16 percent to fund power assets.
Viathan, owned by Synergy Private Equity, develops and operates off-grid power solutions in Nigeria. It issued the bond backed by InfraCredit, a triple A rated credit facility set up by Nigeria’s sovereign wealth fund and GuarantCo.
Synergy has committed capital of over $100 million and has invested in 10 companies in Nigeria and Ghana, it said. Viathan provides power solution for government, household and businesses in Nigeria, using natural gas as fuel.
The bond issue stretches the yield curve for corporates in Nigeria to 10-years, extending maturity for businesses in a country dominated by short-term bank loans. High interest rates have dogged new corporate issues for years.
Viathan plans to use the proceeds to refinance existing short-term bank loans, expand its generation capacity by 7.5 megawatts (MW), and build a compressed natural gas plant.
Nigeria needs an estimated 160,000 MW of electricity to meet local demand. However, it only has capacity of 12,132 MW, of which just around 7,000 is operational.
Twelve pension funds and two insurance firms bought the Viathan bond which was priced at a premium of 82 basis point to the 10-year sovereign benchmark bond through a book building.
The 2027 notes will be listed on over-the-counter exchange FMDQ OTC Securities Exchange.