Economy
Nigeria Sells $2.2bn Eurobond at 10.4% for 2024 Budget Deficit
By Adedapo Adesanya
Nigeria successfully priced $2.2 billion in Eurobond maturing in 2031 and 2034 in the international capital markets to finance deficits from the 2024 budget, according to a statement from the Debt Management Office (DMO) in Abuja on Monday night.
The DMO said that the two Eurobonds, with 6.5 years and 10 years tenors, have $700 million placed in the 2031 maturity, and $1.5 billion placed in the 2034 maturity.
It said that the notes were priced at coupon and re-offer yields of 9.625 per cent and 10.375 per cent, respectively.
“Nigeria is pleased to have attracted a wide range of investors from multiple jurisdictions including the United Kingdom, North America, Europe, Asia, Middle East and participation from Nigerian investors.
“It is an expression of continued investor confidence in the country’s sound macro-economic policy framework and prudent fiscal and monetary management.
“The transaction attracted a peak order book of more than nine billion dollars. This underscores the strong support for the transaction across geography and investor class,” the DMO said.
It said that with respect to the investor class, demand came from a combination of fund managers, insurance and pension funds, hedge funds, banks and other financial institutions.
Speaking on this, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, said that the successful issuance signposted increasing confidence in the ongoing efforts of the government to stabilise the Nigerian economy.
According to Mr Edun, the broad range of investor appetite to invest in our Eurobonds is encouraging as we continue to diversify our funding sources and deepen our engagement with the international capital markets.
Also, the Governor of the Central Bank of Nigeria, Mr Yemi Cardoso, said that the outcome underscored the growing confidence of investors and the resilience of the Nigeria credit.
“It is evident of our improved liquidity position and continued access to international markets to support the financing needs of the government,” Mr Cardoso said.
The Director-General of the DMO, Ms Patience Oniha, said that with the successful pricing of the notes on an intra-day basis, Nigeria had registered a landmark achievement in the international capital market.
Ms Oniha said that the size of the order book at approximately 4.18 times of the offer amount, and the strong and diverse investor base helped to price the new 6.5-year tenor at a 9.625 per cent interest rate.
She said that it also helped to price the new 10-year notes at 10.375 per cent interest rate.
“The DMO remains committed to maintaining transparency and open communication with investors and stakeholders, and appreciates the continued confidence and support of the international and Nigerian investors who participated in the pricing,” she said.
She said that the notes would be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market, the FMDQ Securities Exchange Limited and the Nigerian Exchange Limited.
“The proceeds from this Eurobond issuance will be used to finance the 2024 fiscal deficit and support the government’s budgetary needs.
“Nigeria mandated Chapel Hill Denham, Citigroup, Goldman Sachs, J.P. Morgan and Standard Chartered Bank as Joint Bookrunners. FSDH Merchant Bank Limited acted as Financial Adviser on the issuance,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Tuesday, December 3, after the trading platform ended with no price gainer or loser, according to data obtained by Business Post.
The market capitalisation of the bourse remained unchanged at N1.057 trillion and the NASD Unlisted Security Index (NSI) followed the same route by remaining intact at 3,017.13 points.
The volume of securities traded at the bourse during the trading session went down by 99.5 per cent to 76,362 units from the 16.2 million units achieved a day earlier, the value of shares traded yesterday declined by 99.9 per cent to N147,493.38 from the N125.2 million recorded in the preceding session, and the number of deals decreased by 93.1 per cent to two deals from the 29 deals posted in the previous trading day.
At the close of transactions, Geo-Fluids Plc remained the most active stock by volume on a year-to-date basis with the sale of 1.6 billion units for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units worth N5.3 million.
The most active stock by value on a year-to-date basis was Aradel Holdings Plc with a turnover of 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 296.7 million units sold for N5.3 billion.
By Adedapo Adesanya
Oil soared more than 2 per cent on Tuesday as Israel threatened to attack Lebanon if the ceasefire deal with Hezbollah collapses while the market awaits expectations of an extension of supply cuts by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
Brent crude appreciated by $1.79 or 2.5 per cent to settle at $73.62 per barrel and the US West Texas Intermediate (WTI) crude gained $1.84 or 2.7 per cent to close at $69.94 per barrel.
Israel continued strikes against Hezbollah fighters ignoring last week’s truce agreement in Lebanon.
In retaliation, top Lebanese officials have urged the US and France to press Israel to uphold the ceasefire.
Market analysts noted that the risk to the ceasefire has some oil traders worrying more about tensions in the Middle East.
Although the Lebanon conflict has not resulted in oil supply disruptions, traders have been tracking tensions between Iran and Israel in the past few months.
OPEC+ is likely to extend its latest round of oil output cuts until the end of the first quarter at the meeting scheduled for Thursday (December 5).
OPEC+ pumps about half the world’s oil and aims to unwind output cuts through 2025. However, a slowdown in global demand and rising output outside the group pose hurdles to that plan and have weighed on prices.
OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7 per cent of global demand, in a series of steps agreed since 2022 to support the market.
An output hike of 180,000 barrels per day was planned for January from the eight members involved in OPEC+’s most recent cuts of 2.2 million barrels per day. The hike has been delayed from October due to falling prices.
The global oil demand outlook remains weak and China’s crude imports are likely to peak as early as next year as demand for transport fuel begins to decrease.
Crude oil inventories in the US rose by 1.232 million barrels for the week ending November 22, according to The American Petroleum Institute (API). For the week prior, the API reported a 4.753 barrel build in crude inventories.
So far this year, crude oil inventories have fallen by just over 4 million barrels since the beginning of the year, according to API data.
Official data from the Energy Information Agency (EIA) will be released later on Wednesday.
By Dipo Olowookere
The bears overran the domestic bourse on Tuesday, leaving it battered by 0.03 per cent despite investor sentiment being bullish.
Business Post reports that the loss inflicted on the Nigerian Exchange (NGX) Limited yesterday was due to profit-taking in the consumer goods and energy sectors, which had closed lower by 0.22 per cent and 0.09 per cent, respectively.
They overpowered the gains of 2.68 per cent, 1.00 per cent, and 0.82 per cent recorded by the respective trio of the insurance, industrial goods and banking counters.
Consequently, the All-Share Index (ASI) went down by 31.30 points to 97,702.56 points from 97,733.86 points and the market capitalisation contracted by N19 billion to N59.226 trillion from N59.245 trillion.
The market breadth index was positive during the session after the NGX ended with 29 price gainers and 23 price losers led by Sovereign Trust Insurance, which declined by 10.00 per cent to trade at 72 Kobo.
John Holt depreciated by 9.98 per cent to N8.03, Ellah Lakes plunged by 9.92 per cent to N3.18, Thomas Wyatt crashed by 9.42 per cent to N1.73, and Aradel Holdings moderated by 8.72 per cent to N471.90.
On the flip side, Golden Guinea Breweries and Beta Glass gained 10.00 per cent each to sell for N4.07 and N53.90 apiece, Lafarge Africa soared by 9.95 per cent to N70.15, Honeywell Flour grew by 9.89 per cent to N4.89, and Sunu Assurances improved by 9.88 per cent to N4.67.
Yesterday, investors traded 1.2 billion shares valued at N27.4 billion in 9,403 deals compared with the 446.2 million shares worth N10.0 billion sold in 9,200 deals, indicating a surge in the trading volume, value and number of deals by 159.12 per cent, 174.00 per cent, and 2.21 per cent, respectively.
The busiest equity on Tuesday was FBN Holdings with a turnover of 779.6 million units valued at N18.8 billion, AXA Mansard traded 32.5 million units worth N242.8 million, UBA transacted 31.1 million units for N1.1 billion, Access Holdings sold 27.9 million units valued at N670.9 million, and Ellah Lakes exchanged 23.0 million units worth N76.5 million.
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