Nigeria raises $4bn via Eurobonds in two days

The Debt Management Office (DMO) has reported that Nigeria has raised more than $4 billion through Eurobonds after an intensive two days of virtual meetings with investors across the globe.
The interest in the bonds, it said in a statement, was a reflection of investors’ confidence in the economy.
It explained that the Order Book peaked at $12.2 billion, which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced.
“This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.
According to the DMO, bids for the Eurobonds were received from investors in Europe and America, as well as Asia. There was also good participation by local investors.
The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum
The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023, the DMO said.
It stressed that since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of $4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act.
Nigeria returned to the International Capital Market (ICM) three years after its last outing in 2018, when it floated a $2.5 billion aggregate Eurobonds under its Global Medium Term Note Programme.
The DMO had stated that in addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of the Eurobonds would benefits the country in many other strategic ways.
It would also bring about an inflow of foreign exchange, leading to an increase in external reserves to help support the naira exchange rate as well as Nigeria’s sovereign rating, DMO said.
It has freed up space in the domestic market for private sector and sub-national borrowers.
“In effect, it helps the sovereign not to crowd out other borrowers in the domestic market. The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector, notably banks, to issue Eurobonds to raise capital in the ICM.”