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Bank of New York Mellon (BNY Mellon), in collaboration with Standard Bank Group, has introduced Global Depositary Notes (GDNs) backed by Nigerian sovereign debt denominated in naira, marking a significant step toward expanding foreign participation in Nigeria’s local debt market.
According to a statement released by the Central Bank of Nigeria (CBN) on Thursday, the initiative is designed to provide international institutional investors with streamlined access to Nigeria’s high-yield fixed-income instruments.
The GDNs will be eligible for settlement through major global clearing systems, Euroclear and Clearstream, enabling broader participation from offshore investors and facilitating easier entry into Nigeria’s local currency bond and Treasury bill markets.
“This development represents a significant milestone in efforts to deepen foreign access to Nigeria’s local debt market,” the CBN stated. “The initiative is designed to give international investors streamlined access to the elevated yields available in Nigeria, Africa’s most populous nation.”
Nigeria’s High-Yield Appeal
Nigeria’s local debt instruments are among the most attractive in emerging markets in terms of returns. On June 4, the country’s 182-day Treasury bills were sold at a yield of 18.5%, while its 2033 benchmark bond was trading at a yield of 19.33% as of mid-June, underscoring its position as a lucrative destination for yield-seeking investors.
Chris Kearns, Global Head of Depositary Receipts at BNY Mellon, described the new GDN programme as a pivotal initiative to unlock African investment potential and support the growth of capital markets across the continent.
“The GDN programme will simplify global investor access to high-yield, local-currency Nigerian government securities,” BNY Mellon said in a separate statement. “It combines Standard Bank’s deep local market presence with BNY Mellon’s global investment infrastructure.”
Structure and Market Access
The GDNs will be issued in two series—Regulation S and Rule 144A—catering to both offshore institutional investors and qualified U.S. investors, respectively. These instruments will offer exposure to Nigerian government bonds and T-Bills without the complexities typically associated with investing directly in local currency assets.
Sola Adegbesan of Standard Bank highlighted the strategic significance of the partnership, stating that the GDN structure provides a simplified and regulated entry point into one of Africa’s most dynamic economies.
“This represents a unique opportunity for investors to participate in Nigeria’s debt market while benefiting from the infrastructure and settlement efficiencies of the international financial system,” Adegbesan said.
Broader Implications
The move aligns with Nigeria’s broader efforts to deepen financial market integration, attract foreign capital, and support macroeconomic stability through increased investor confidence. It also reflects a growing trend of leveraging depositary instruments to bridge frontier markets with global capital pools.
As global investors continue to seek diversification and yield amid rising interest rates in developed markets, Nigeria’s naira-denominated debt—now accessible via GDNs—may become an increasingly attractive proposition.
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