Nigeria Sells $4bn Eurobond on Strong Investor Appetite
By Ashemiriogwa Emmanuel
The Federal Government of Nigeria has successfully raised the sum of $4 billion from local and international investors through the sale of Eurobond, the Debt Management Office (DMO) has confirmed.
In a statement, the DMO disclosed that the debt instrument was issued after a two-day virtual meeting with investors across the globe.
The statement said the paper, which attracted investors from Europe, America as well as Asia, was issued in tranches of three tenors: $1.25 billion for seven years at a yield of 6.125 per cent, a 12-year bond at 7.375 per cent worth $1.5 billion, and a 30-year tranche of $1.25 billion sold at 8.25 per cent.
The debt office explained that the $3 billion offer was heavily oversubscribed, as investors staked $12.2 billion on the note, which enabled the government to raise $1 billion more than the original offer.
In the notice, the set date for settlement for the bond is on September 28, while the instrument will be listed on the London and Nigerian stock exchanges.
According to the DMO, “This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome.”
It noted that the size of the order book and the quality of investors demonstrated confidence in the Nigerian economy.
The office also explained that the Eurobond was part of a government plan to raise $5.71 billion in external financing to help fund spending in 2021 and to partly finance the N5.6 trillion deficit.
This would also reflect in the nation’s external reserves which have been on an upward trend in recent weeks.
Business Post reports that on Wednesday, September 22, the Nigerian external reserves stood at $35.7 billion.
Before now, the last time Nigeria went to the international debt capital market was in 2018. The country initially planned to sell Eurobond last year, but the COVID-19 pandemic thwarted this and it was diverted to the domestic market.